CRYPTOCURRENCY 101 (#3): WHAT IS THE DIFFERENCE BETWEEN A PUBLIC KEY AND A PRIVATE KEY IN A WALLET?
In the article #1, we mentioned the concept of blockchain, coins and tokens. However, none of that would exist, if there was not a place for us to send & receive our coins or tokens. Therefore, a wallet is an essential part of cryptocurrencies.
A lot of people use cryptocurrency wallets, but there is a misunderstanding about how they work. Unlike traditional physical wallets, digital wallets do not store currency. In fact, cryptocurrencies could not be stored in any physical location or exist anywhere in any physical form. All that exists are records of transactions stored on a particular blockchain.
Cryptocurrency wallets are software programs that contain our public and private keys, which interface with various blockchain, so we can monitor our balance, send money and conduct other operations. In another way, cryptocurrency wallets exist to enable users to send, receive digital currency and monitor their balance. If we want to use any type of cryptocurrencies, we must have a digital wallet.
In cryptocurrency, an address contains two main factors. There is a public key and a private key. A wallet can contain multiple addresses, or we can say a wallet is a collection of private keys that correspond to addresses.
Please keep in mind that with a certain type of coin will correspond with a certain type of address, because there are numerous blockchain with various structures. It is just simply explained that if you send a Bitcoin to an Ethereum address, that Bitcoin will be long gone, so beware!
A public key is a cryptographic code which allows us to receive cryptocurrencies into our account. Commonly, someone will ask “Please give me your address, so I can send over some coins”, they actually mean “Please give me your public key, so I can send over some coins”. The public key is where the fund are deposited and received. An address is the shortened version of the public key.
Here is an example of a public key:
A private key is a complex form of cryptography which allows us to access our crytocurrency fund. A private key is a crucial aspect of Bitcoin and Altcoins and its security make up helps to protect a user from theft and unauthorized access to fund. It can be simply perceived that a private key is the key to access our accounts. In order to send, receive, deposit or withdraw our fund, we need a public key which is our account number and a private key which represents a password to access our account.
Here is an example of a private key:
You can also find an explanation in this video: https://youtu.be/FuTseaqOF9g