Submitting details.
Please wait ...

Wallet Addresses, Public and Private Keys: The Interconnected Relationship Between Crypto Keys

Wallet Addresses, Public and Private Keys: The Interconnected Relationship Between Crypto Keys

 

One of the first steps of understanding cryptocurrency is learning what wallet addresses and public and private keys are. Making transactions will surely acquaint you with these crypto keys. But having a clear understanding of their concept will guarantee a safe trade and easy management of your crypto assets in the long run. 

Not to worry! These keys aren’t as complex as they look! This lesson will guide you through using the three main tools and how deeply interconnected they are with one another. 

However, let’s take a quick detour and talk about “cryptography” – the domain to which cryptocurrency owes its name.

The History of Cryptography

“Cryptography” is derived from the Greek word “kryptos,” which means “secret writing.” It’s the method of encrypting and decrypting information, keeping it confidential and preventing any unauthorized third parties from having access to the said information. 

The field evolved over time and became a different branch of computer science. Its origins date back to academic research and military writing, which eventually extended its scope to the private domain. 

The Significance of Using A Two-Key System

Basically, the two-key system can be explained as follows: public keys let you receive transactions; on the other hand, private keys are essential for sending transactions. Using a unique pair of cryptocurrency keys (a public and private key) is what we call asymmetric cryptography, one of a blockchain’s vital aspects. They are connected to each other in mathematical terms.

In essence, public keys have their origins in private keys. This connection makes unforgeable signatures that can only be affirmed by someone in the network who knows about the corresponding public key. Thus, ensuring only a certain party has permission to decrypt the data.

The Interconnected Relationship Between Crypto Keys and How They All Work Together

There are a lot of misconstrued perceptions surrounding crypto wallets, addresses, and keys. For more clarification on this topic, let’s take a good look at each of them, shall we?

Address

An address is a set of letters and numbers generated in a random manner, representing a similar type of combination of a unique bank account number. The first Bitcoin address generated – Bitcoin genesis: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa – sets an example.

The thing is, you can create an address for free within seconds, even without the presence of a third party. You’ve got the liberty of creating multiple public addresses as you like. 

These public addresses can then be freely shared. That way, others can send digital currencies to your address.

  • Networks like Etherium or Bitcoin are pseudonymous and aren’t entirely anonymous, which means transactions and holdings are viewable by anyone who has knowledge of your public address.

Public Keys Vs Private Keys

The two keys that run the blockchain are called public keys and private keys. 

A public key is similar to that of an account number. You can freely share it with everyone you want, and anyone can send transactions to it. 

However, private keys are different. As the name suggests, a private key should be kept confidential. Think of it as a verification code or PIN, which, together with its equivalent public key, provides accessibility to the blockchain’s actual funds.

In any event, you should keep the access to your private key(s) safe and NEVER share it with anyone. Keeping them in paper or hardware wallets is the most secure way of storing them.

Take note, however, that you can keep them in an (encrypted) file, which you can then save and store offline

Wallet

A file with a database is the simplest example of a wallet. It contains your digital key(s) and address(es). You can store them offline and don’t have to have any association with the actual blockchain.

Think of crypto wallets as encrypted virtual keychains with all the crucial information necessary to access blockchain funds. 

Key Takeaways

  • Wallet addresses are a set of numbers and letters randomly generated.
  • The set usually contains 26 to 35 alphanumeric characters.
  • In principle, wallet addresses are generated by a wallet and are one-time links. 
  • A wallet address is necessary for sending or receiving digital assets.
  • Digital assets are not actually stored in a wallet.
  • A public and a private key are needed to access wallet addresses.
  • Wallets are where a collection of addresses is stored.
  • NEVER share your private keys with other people.

DISCLAIMER

The Site does not offer, and must not be construed as an offer, of financial products and is not an invitation to you to acquire any financial products. The Site does not, and must not be construed as providing recommendations in relation to any financial products.

Information on the Site about any entity should not be considered in any way as an indication of the merits of the entity or any products. It does not in any way imply that an entity is trustworthy or genuine and should not be considered in any way as an indication of the merits of the entity or the product.

To the extent permitted by law, Orange Brick Road expressly disclaims any responsibility or legal liability to anyone whatsoever for any direct, indirect, special, incidental, consequential or punitive loss or damage caused by or in connection with the reliance by a person or entity on content or information made available on the Site, including without limitation where there are any errors or omissions in the content or information on the Site.

Categories: Crypto Security, Crypto Tutoring, Digital Finance

Tags: business

Related Articles

Facebook Pinterest LinkedIn Instagram Back to all posts

Recent Articles

Back to all posts

Tags

Business, Business Start Up, Search Engine Optimisation, Marketing, Digital Marketing, Websites, Blogs, Personalised Marketing, Email Marketing, Online Marketing