In this post, we will be addressing one of the most important questions that every Crypto enthusiast or investor will have to ask themselves at some point, and that question is ‘’What is a Private key’’?
What exactly is a Private Key?
A private key in regards to ”Cryptography” is a set of alphanumeric phrase that is used to encrypt and decrypt specific data. Knowing the importance of a Private Key is an integral aspect of Bitcoin and essentially every other Blockchain-based digital currency.
For those new to the Cryptospace, a Private key for electronic/digitally encrypted information is really just bits of code that use an algorithm to lock and unlock information. A Bitcoin private key can be represented in one of several ways, but it’s common to see a randomized combination of Upper/Lowercase Alphabets and numbers.
Every Bitcoin wallet contains one or more private keys, which are mathematically generated and meant to be saved in the wallet file of the person who owns the balance. Theoretically speaking, it’s impossible to reverse engineer and reach the private key from which it was generated as the odds are against it. All private keys are mathematically related to all Bitcoin addresses that are randomly generated by a third-party wallet service provider since there can be only 1 Private key linked to a specific Bitcoin Address
Importance of a Cryptic Private Key?
If you want to move Cryptocurrency from a wallet, you’ll be required to know the Private key in order to be authorized to transfer digital assets from one address to another. When dealing with a distributed ledger, a Private key is used to sign a transaction when transferring digital currencies, this means that you’ll need a private key to prove that you’re allowed to send Bitcoin to a different address
Without a private key, you’re not entitled to move any Bitcoin hence you’ll no longer have control over the funds. Not having any power to trade nor transfer Bitcoin as the result of non-authorized access means you’ll most likely never be able to retrieve lost funds. Centralized Exchanges like Bittrex, Coinbase or Binance have full control over the Cryptocurrencies that are stored via the integrated wallet, these services do not share out sensitive information like private key. When an online Bitcoin wallet provider does not generate or reveal a set of private key, you can assume that the service is fully responsible of managing clients digital assets.
What is the difference between a Public and Private key?
The Public and Private key pair are comprised of two uniquely related cryptographic keys (consists of long random numbers). The Public Key is what its name suggests is Public whereas a Private key is meant to remain confidential to the respective owner.
A Private key is usually the longer of the two, and are used to generate a signature for each transaction done via the Blockchain. The other way to differentiate these two is by the technology behind each of these keys. Whereby the public key is used by one party to perform encryption and is not the same as a private key which is used in decryption. Each user will have both a public and a private key, the public encryption key and a private decryption key. As for the Public key, it is meant to be shared as it’s a public address just like how you would give out an email address to receive email, a wallet address should be given out to receive payments.
And a private key is basically like a password for your email address so that you can access and send a message from that particular email address and view your messages, wallets have private keys that are needed to send funds from a wallet to any other address or approve of a transaction out from the user’s wallet.
Summary
If you don’t own or know the set of private key of your Cryptocurrency address, you’re not in control of your funds
Unfortunately, if a Private key ends up forgotten or non-retrievable the end result will be you losing direct access to any digital assets stored on the Blockchain because you’re unable to access funds using a Crypto wallet client without the private key. If you don’t have a private key, you cannot transfer or retrieve any Cryptocurrency stored on the blockchain network as it’s set to remain locked up until the exact private key grants your authorization to sign signatures
Make it a habit to secure your own Digital assets by remembering or saving a set of a private key in a secure environment safe from hackers or prying eyes
Found your blog as a result of being featured in @jrswabs technology curation post.
This is a great explanation of the keys which, embarrassingly, I never really understood except to know that I had to keep them safe.
I’ll be following along for some more education in the wild and wonderful world of crypto.
~T
Much appreciated! Will be sharing a lot of educational post this coming year, you might be interested in some of it and consider checking out @steemitguide for Steem related post!
So, how much crypto has been abandoned because people lost their private key?
PS: I have my private keys stored in an encrypted file on an external network.
By doing a Google search, people are assuming that almost 1-4 Million of Bitcoin will forever be lost! If that's the case, a lot of people must have forgotten their Private key or been hacked. I've lost Bitcoin because of not exactly knowing what a private key is! You're doing the right thing by keeping your Private keys stored in an encrypted File on an external network, try to avoid keying in your private key on third-party application as much as possible!
A better place would be written on a piece of paper and stored in a safe in your (or your friend's) home.
That would be the safest method! Storing your Private Keys offline
I will be featuring it in my weekly #technology and #science curation post for the @minnowsupport project and the Tech Bloggers' Guild! The Tech Bloggers' Guild is a new group of Steem bloggers and content creators looking to improve the overall quality of our niche.
Wish not to be featured in the curation post this Friday? Please let me know. In the meantime, keep up the hard work, and I hope to see you at the Tech Bloggers' Guild!
If you have a free witness vote and like what I am doing for the Steem blockchain it would be an honor to have your vote for my witness server. Either click this SteemConnect link or head over to steemit.com/~witnesses and enter my username it the box at the bottom.
We always appreciate a Shoutout! Hope that all the Steemit users get to learn more about the importance of a Private key
Thanks for the head up on this
Make sure to check our Website! For more Educational guides like this
It is pretty informative blog for newbie, Initial Crypto-Enthusiast Should Know about private key.
#KeepItUpMan :)
Very useful article thank you very much for post