INTRODUCTION
Understanding bitcoin and its intricate structure requires understanding the difference between public keys, private keys and public address. Simplifying crypto would be pointless without understanding these concepts. This is because they are easily and mistakenly interchanged. However, I have got your back, people!!! I will try to make it simple.
Private keys
In their purest form, private keys are 256-bit numbers. They are randomly generated and are actually sophisticated cryptography.
A bit is short for binary digit. A binary digit is either 1 or 0. Get it?
However, because the number of possible combinations for a 256-bit number is extremely large and the system is complex, the use of a 64-character hexadecimal system was implemented.
A character is a symbol representing a number or an alphabet. It is usually larger than the bit and unlike the bit, allows numbers 0 to 9. An hexadecimal system uses letter A to F and numbers 0 to 9. This alphanumeric system is more simple.
Private keys allow users to access cryptocurrency and helps protect users from theft and authorized access to funds. They are also an important part of bitcoin and altcoins.
A digital wallet stores the private key of user. The wallet software creates a digital signature when a transaction is initiated by processing the transaction with the private key.
This signature confirms a particular transaction and ensures transaction cannot be changed in any way. If you try to alter it even a little, THE SIGNATURE WILL CHANGE!
An example is: a1red3b6c4fc650ba3e6d4e8f912d3bc4ab0d5e3c7dba7e7c21ad4f8a3fe5ab9. I made this up.
Private keys can also be stored on paper wallets (which are documents that have been printed with the private key and with a QR (Quick Response) code on them so that it can easily be scanned when a transaction needs to be signed) or using a hardware wallet (which uses smartcards or USB devices to generate and secure private keys offline).
Public keys
Public keys are created from private keys. It is usually 24 to 34 characters. commonly, a bitcoin public key starts with 1. To avoid confusion and fraud, small letter l, capital letter I, number 0 and capital letter O are excluded. They are used to confirm authority of action in a blockchain and comes from the owner of the specific private key. Hence, the private key is private and cannot be seen. Since the private key takes the form of a digital signature, the person on the other side only sees the digital signature and public key.
The public key is derived from the mathematically theory of elliptic curve multiplication.
Every public key is 256 bits long and the final hash which is your public address is 160 bits long. Trying to use reverse mathematics to derive the private key would take the worldâs most powerful supercomputer many trillion years to crack!
Public address
The public address is derived from the public key. It is a major identifier for a transaction as it is where funds are deposited and received. This is also what people input if they wish to send you cryptocurrency. Each transaction has a unique public address generated by applying the public key into a cryptographic algorithm called secure hash algorithm.
Imagine the public address was a mailbox. The private key would be the key of the box (obviously!). The mailman or anyone could insert letters through the mailbox's opening. However, only you can retrieve the contents of the box with the key. Anyone gets the key, the contents are compromised. You lose it, you cant access it!
And that is all for now! Thanks for going through the article. I would love to hear from you :)!
This might be an interesting article to those who are not familiar with it. More episodes for the simple minded on the way?