Public and Private Keys, What Are They and How to Use Them?
Bitcoin and many other cryptocurrencies are based on what is called Public Key Cryptography. How it works is beyond the scope of this article, but if you are planning on investing in cryptocurrencies, it is important to know what they are and how to use them.
Public Keys
Public keys are just that, information that you make public so that you can receive cryptocurrency from someone. This is what a public key will look like:
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A long string of numbers and letters that you would make public so you can receive crypto. You will get a pair of public and private keys every time you create a wallet. No one can access your crypto with this public key, they can only send crypto to it. You would need the corresponding private key to access/send the crypto. Think of it in terms of an email address and password. You make your email address public so that you can receive emails, however, you keep your password to yourself so that only you can access and send emails. No one can access your emails with your email, they can only send you emails and would need the password to access and send emails. The same goes for public and private keys. You can only send to a public key, but the public key’s corresponding private key will then allow you to access and send send crypto.
Private Keys
Private keys are just that, information that you keep private so that you and only you can access and send your cryptocurrency. Public keys are derived from private keys, but private keys cannot be derived from public keys. It is a one way street. Private keys look the same as a public key, just a long string of numbers and letters:
1GeaKvheqTbv1spDUi8YEbVwRwPEgutX29
A “seed phrase” is another form of a private key and is a sequence of 12–24 random words. An example of what a seed phrase would look like is this:
coffee wire laptop speaker pretzel headphones piano ceiling kitchen table garbage television
They may look different, but both serve the same purpose, to allow you to access your cryptocurrency. An email address is to a public key as a password is to a private key, except a private key may have millions of dollars associated with it. Therefore, I cannot stress enough the importance of keeping your private keys safe and private. Don’t even tell your dog. Make lots and lots of backups. Write it down on a notecard and store it somewhere safe. Save it as a digital text file on multiple USB drives so that if you lose one, you have many others. I would also highly encourage encrypting these text files on your USB drives. This will ensure only you could ever access your private keys and thus your crypto if someone were to somehow get your USB drive.
There is a saying in crypto, “not your keys, not your bitcoin” and it could not be more true. So keep it safe and private and make many backups or you will lose your money! I have yet to lose a penny of crypto because I make lots and lots of backups and write down my private keys and store them somewhere safe. With great financial freedom comes great responsibility. Simply keep your private keys safe, don’t lose them and your wealth will be safe.
How to transact with cryptocurrency
Sending crypto is easy. Remember, public keys are put on public display so that you may receive crypto. Private keys are kept private and are used to send crypto. I will show you an example of how to send a transaction in a popular wallet, Atomic Wallet. It will be a very similar process in other wallets and on exchanges.
Step I: Access the crypto that you want to send in your wallet. Make sure you are sending bitcoin to a bitcoin address. Sending bitcoin to an ethereum address will result in a loss of funds
Step II: Paste the public key in the corresponding box, input the amount to send and click send (I wish I had 25 BTC to send lol)
Voila, you have successfully sent a bitcoin transaction. Easy, huh? Now let’s check to see if the network received the transaction and watch it go through in real time. This is the beauty of bitcoin and many cryptocurrencies. They are decentralized, public ledgers that everyone can see, but no one knows the identity behind the transactions. We will use what is called a “block explorer” to see our transaction. Here is a link to a bitcoin block explorer:
It is very easy to use and there are multiple ways of seeing your transaction on the blockchain. Every transaction comes with a transaction ID that identifies a specific transaction on the blockchain. Copy and paste this transaction ID into the block explorer search bar and search. You will get a screen that looks like this:
It is quite self-explanatory. AMount transacted, fees, when it was received. Don’t worry about the other stuff. Confirmations just means how many blocks have been mined after the block your transaction was included in. Don’t worry about what that means right now, this topic is for another article, just know that it takes 6 confirmations for your transaction to finalize. In bitcoin, this takes about an hour. The network receives the bitcoin transaction almost instantly and the recipient may receive the bitcoin much quicker than that, but it is considered finalized once there have been 6 confirmations.
This block explorer tool is to allow you to see that your transaction was received by the network. As I mentioned before, you should send just a small amount of crypto first and then check the block explorer to make sure it has been received by the network and that it is going to the right place. You can do this for any other cryptocurrency as well. They all have their own block explorers you can view transactions on.
I hope this article has given you a better idea of how to use and what public and private keys are. Hit me up in my discord channel @Saved BTC if you have questions or need help!
neuroboy
