Crypto Glossary

Posted on September 13, 2021 in
Glossary

Private Key

The only purpose of a private key is to prove to others that you are the owner of a specific cryptocurrency address. If you gain control of a private key, you will have the ability to conduct a transaction and spend the funds associated with that address. A private key is something that you should never share with another person or entity; the name of the key serves as a hint that it should never be shared.

What is a private key?

Authenticating asset ownership and encrypting the wallet are done with private keys while generating public addresses is done with public keys. Public addresses are used to identify the wallet and to receive funds. When you are setting up a cryptocurrency wallet, you will typically be presented with a seed phrase consisting of twelve words. These words are a human-readable representation of an infinite number of possible combinations of public keys and the private keys that correspond to them.

How do private keys work?

To show that an address is owned, you simply declare the private key associated with it to be yours. A benefit of keeping the currency on the blockchain, rather than in a private key, is that it’s safer. This widely held misconception is that coin keys are stored in cryptocurrency wallets. 

While you may carry a wallet if you like, it is not necessary to do so to keep your keys safe. For the vast majority of users, keeping private keys in a secure wallet is highly advised. 

To conduct a Bitcoin transaction, you must prove that you control the address by broadcasting a message to the entire network that your private key has been generated. The fact that you own the private key proves this. This initial interpretation may appear correct at first glance, but you should know that this is not the case. It is never revealed to anyone else what your private key is. 

Using your private key in any way makes you no longer private, and that is a fundamental breach of privacy and encryption. To send your signature, you must use a specific equation that is calculated automatically, unfortunately. Signing will be simple and quick because of this, so feel free to sign as often as you like. 

For every private key, a public key is generated. A public key must be broadcast to accept money from a different sender who has already sent you cash. It is possible to generate a public key from a private key, but this is made much more difficult when attempting to reverse the process.

Public vs Private Key

Private key 

In addition to encrypting and decrypting the data, the private key is also used to perform cryptographic functions. This shared encryption key is used by both senders and receivers to encrypt sensitive information. In addition to being the symmetric key, the private key is also known as asymmetric-key since both parties possess it. It’s much faster to use private key cryptography instead of public-key encryption. 

Public key 

Public keys are used to encrypt data, while private keys are used to decrypt it. Both the sender and the receiver of the encrypted sensitive information share the private key. Public key asymmetric cryptography is also called asymmetric cryptography.

Related Articles

What is a public / private key?

April 10, 2020

What is a public / private key?

When you first start trading digital assets, you may hear the terms public and private keys. These are codes you use to access your account. The keys are digital assets graphically hidden, which means they undergo encryption to make them secret. For the code to be reread, it requires decryption.

Bitcoin (BTC) Price Prediction 2022 – 2030 According To The Crypto Experts

August 08, 2022

Bitcoin (BTC) Price Prediction 2022 – 2030 According To The Crypto Experts

Bitcoin Bullish or Bearish Trending Now! Let’s see Bitcoin (BTC) price prediction from 2022 – 2030 before you invest.

What Is Crypto Fear And Greed Index? Should You Look At It Before Buying Crypto?

August 08, 2022

What Is Crypto Fear And Greed Index? Should You Look At It Before Buying Crypto?

Fear and Greed Index is used to measure investors’ sentiments in the crypto world. Learn more about it before your next purchase.

We offer investors a variety of opportunities in the digital assets industry. Our innovative platform provides financial access for anyone seeking investment returns anywhere, anytime. Our ecosystem aims at making finance an everyday enriching activity.

ZEI is currently registered under and listed by Bappebti as a candidate merchant. To date, the Indonesian government has established crypto assets as commodities which can be determined as the subjects of futures contracts, which can be traded through the Futures Exchange (of crypto assets).

RISK WARNING ON THE SERVICES

Before you use the Services, you must be aware of the following:

  1. You should not transact Digital Assets if you are not familiar with Digital Assets. Transacting Digital Assets may not be suitable for you if you are not familiar with the technology of the Services that are provided.
  2. You should be aware that the value of Digital Assets may fluctuate greatly. You should buy Digital Assets only if you are prepared to accept the risk of losing all of the money you put into such Digital Assets.
  3. You should be aware that although we strive to provide you with excellent service, we do not guarantee that the Site or Services will be available without interruption.
  4. Digital Assets held in your Hosted Wallet and funds in your Fiat Wallet are not subject to the Indonesian insurance or guarantee scheme as provided by the Indonesian Deposit Insurance Corporation (Lembaga Penjamin Simpanan).