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If you are aware of cryptocurrency wallets, or if you are considering cryptocurrency wallet development, it is more likely that you have heard of a public key and private key. But, for some of you, these may just be the terms – you may want to comprehend what are these keys exactly, what role do they play in wallets and why are they used. In this blog, we share in-depth insights on what are public keys and private keys, how they are generated and how you can enhance their security.
So, let’s get started.
To understand public and private keys, let us take an example of a mailbox where you receive your physical mails.
Your mailbox has a unique and specific number (the address of your building). If someone has to deliver you a letter, that individual must know your address. As a receiver, you have a private key to unlock your mailbox and collect your letter.
In real life, you would never give your mailbox’s key to anyone, right? You will fear that the other person might steal or tamper the letters and other content inside your mailbox. Similarly, the private key needs to be kept safe with yourself.
Like your home or office address, anyone can know your wallet address to send you cryptocurrency. This wallet address is determined by your wallet’s public key.
To unlock (spend or send) your crypto assets, you require your wallet’s private key.
Now, let’s explore the technical aspect of public and private keys.
What is the private key?
A private key is a secret, alphanumeric number used to spend or send cryptocurrency to another wallet address. It is a 256-bit long number which is randomly generated when you create a wallet. The degree of uniqueness and randomness is ensured by cryptographic functions for a security purpose.
For example – Bitcoin private key looks like the following:
It always starts with 5.
What is the public key?
A public key is also an alphanumeric number which is derived from a private key by using cryptographic math functions. However, it is impossible to do the reverse engineering to find out which private key generated the given public key.
The public key, or the public address, is used to receive cryptocurrency.
This is how a public key looks like:
You can create multiple public keys to receive cryptocurrency.
What is the use of a private key and how is it generated?
A private key is used to make irreversible transactions. It is used to spend and send cryptocurrency to anyone around the globe. The irreversibility is ensured by mathematical signatures linked to each transaction whenever a private key is used to send cryptocurrency.
These signatures are unique for each transaction, even if they are generated from the same private key. The signatures are thus impossible to copy and a wallet user can use the same private key over and over again.
Furthermore, the signatures have a mathematic relation with crypto addresses. This relationship helps ensure that the signature is of a particular account holder who wants to transfer cryptocurrency.
How to secure your private key?
Some people prefer to memorize their private key. Although this is safer than storing the key online where it can be easily hacked, there are chances that a user might forget the key. In such a scenario, the cryptocurrencies linked to that address will be lost forever.
In February 2019, the unexpected death of the owner of Canada’s largest cryptocurrency exchange left £145 million of cryptocurrency locked in the crypto wallet as he was the only one to know the password.
Besides, other risks related to the security of private keys are clever tricks aimed at convincing wallet users to readily import their private keys to third parties.
For example, a team of hackers did a scam in 2017, known as Bitcoin Pay, which enticed wallet users to share their private keys with the development team to claim new tokens.
The lesson that can be learned from these scams is – never share your private key with one and keep a backup of your wallet.
Using seed phrases to safeguard your private key
The use of seed phrases has gained huge adoption during cryptocurrency wallet development. Seeds are a series of characters that are used by the wallet to generate private keys for wallet addresses. The software program that manages your wallet generates a unique seed phrase in the initial stage of setting up a user account. This seed phrase needs to be kept safe with yourself.
In an event when your smartphone, laptop or hard drive crashes or get stolen, you can download the wallet and use the seed phrase to regenerate the private key and restore the wallet.
For any cryptocurrency wallet, public and private keys play a major role. The private key, especially, is the most important thing as it confirms your ownership to crypto assets stored in your wallet. Thus, it is of utmost importance that you safeguard your private key against any hacks, unauthorized access, and theft.
At Antier, our expertise lies in building highly-secure, user-friendly, scalable crypto wallets to allow secure transfer and storage of crypto assets. We leverage mnemonic phrases to reinforce the security and enable easy restoration of wallets. As an experienced cryptocurrency wallet development company, we take pride in our ability to deliver a feature-rich, customized white label wallet in just 3 weeks. Besides, our seasoned and skilled Blockchain developers can build a secure, easy-to-use wallet for you from ground zero. We emphasize on delivering the best solutions to help you accomplish your goals and stay ahead of the game.
For expert advice on cryptocurrency wallet development at absolutely no cost, or to explore the list of features that reinforce out wallets, browse through our cryptocurrency wallet development service.
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