So you know how a blockchain works (if you don’t, we’ve simplified it for you here 😉), but do you know how your crypto transactions work before it gets mined on the blockchain? This is where public and private keys come into play.
Public and private keys play a very important role in allowing you to send and receive cryptocurrency without requiring a third party to verify the transactions. You can use these keys to send your crypto to anyone, anywhere, and at any time.
So what is a public key?
A public key is a large numerical value (literally just a long string of numbers, letters, and special characters) that is used to encrypt data. It is paired with a private key (we’ll get to that in a bit).
While anyone can send transactions to the public key, you need the private key to “unlock” them and prove that you are the owner of the cryptocurrency received in the transaction.
The public key is like your bank account number where you can share it with anyone who wants to send you money online.
What is a private key?
As opposed to the public key, the private key should be kept well… private. It gives you the ability to prove ownership of the receiving-end of a transaction. The private key can take many forms, like codes, a mnemonic phrase, (a group of words that acts as a password to something) or even a QR code.
Regardless of its form, it is essentially an astronomically large number and while you can generate a public key from a private key, you can’t do the opposite as it’s practically impossible due to ‘trapdoor functions’.
Trapdoor functions are algorithmic puzzles that are simple to compute in one direction, but extremely difficult to solve when taking the inverse approach.