What is a Private Key?
The purpose of the private key is for a user to gain access to his or her cryptocurrency located within a digital wallet. To understand this more clearly, it is best to go through the steps required for storing digital coins.
The link between a private key and digital wallet
Virtual cryptocurrency must be stored within a digital wallet. This digital wallet can be held by a third-party such as a cryptocurrency exchange, or it can be held by you using a cryptocurrency wallet.
When a new wallet is created, an algorithm will generate a public key and a private key assigned to that wallet. The public and private keys are a randomly generated selection of numbers and letters. This makes them extremely hard for a hacker to get his or her hands on.
In other words, a private key is a number between 1 and 2^256, to brute force it you would need to guess until you hit the right number between 1 and 115 quattuorvigintillion. That’s such a high number that it is hard for the human brain to process, but to put it in perspective, it’s even greater than the estimated number of atoms in the universe. Even the world’s fastest supercomputer – IBM’s Summit – if it were tasked with brute-forcing a Bitcoin private key would effectively take forever to break just one wallet,
The two keys are mathematically linked via the algorithm of the chosen cryptocurrency. For example, the Bitcoin algorithm will differ from the Ethereum algorithm.
All blockchain algorithms ensure that the private key can be used to generate the public key, but the public key cannot be used to generate the private key. This makes the system extremely secure and prevents unauthorized access to your cryptocurrency.
The public key of the digital wallet becomes the wallet address. Think of this like a bank account number.
The private key becomes a user’s way of proving that they are the owner of that wallet. Think of it as your account password.
Public keys can therefore be shared, but private keys should be kept….well…private.
Where are private keys stored?
Luckily, private keys don’t need to be remembered. Private keys are stored within the digital wallet, therefore only those with access to the digital wallet have access to the private keys.
Unless you copy and paste your private keys to your friends, grant them access to your digital wallet or fail to secure your wallet properly, no one will be able to take your cryptocurrency.
When a user wants to perform a transaction from their wallet, the software signs proof of the private key, hence providing them the authority to make the transfer. This is completed without disclosing what the private key actually is.
The signature of the private key confirms that a certain transaction has been generated from a specific user and means that the transaction cannot be changed. This ensures the credibility and safety of the blockchain system.
Key points to remember
Private keys are simply a random list of numbers and letters. Each digital wallet has both a public and private key, which are linked via an algorithm. The private key is the proof required to complete a transaction. They are held on the digital wallet, which means access to the digital wallet should be kept extremely secure, and only one person should ever have access – you.
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