What is Private Key?

– by Tanish Mittal

Let’s start this topic with an example.
When you open your bank’s app to check your balance or to send someone money, you’re greeted with a ‘Enter your PIN’ screen before you can log in.
In the crypto industry, a private key is something of that sort, but the catch is that the key is a mixture of letters and numbers, and that is used to unlock the virtual locker that holds your money.

What’s the difference between Public & Private Keys?

A public key is like your bank account number or your email address, that if given to someone, can only be used for receiving. The key is made using complex algorithms and can be sent to anyone without any hassles or fear. But on the other hand, private keys are meant to be kept ‘private’, as it’s just like the password of your account that holds all your digital assets. And if gone into the wrong hands, you can lose everything within seconds.
(Read more: What is a Public Key?)

So what’s the value of private keys?

One of the cryptographic advances that make digital money viable and secure is the concept of public and private keys. Here’s how it works.

• Your public key is produced by your private key, which makes them a matched pair, according to some sophisticated arithmetic.

• Cryptocurrencies like Bitcoin and Ethereum are decentralized, which means that your digital money is not held by a bank or any other entity in the middle. Instead, a blockchain system distributes your cryptocurrency over a network of computers. Crypto blockchains have the advantage of being open, with every public key and transaction information visible to anybody.

• When you perform a transaction with your public key, you use your private key to confirm that it’s truly you. Even while everything is public, it is also anonymous; you don’t have to give your name, address, or any other personal information to use cryptocurrencies.

• For example, Ethereum (ETH). Even while anybody with a private key can see when ETH is purchased, sold, or used, only the holder of that key may complete the transaction.

Note: Keep your private key safe
• Save them offline in a secure location.
• Put them in a cryptocurrency wallet and keep them safe online.

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