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
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 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.