If you’ve read any of our other content, you may have seen us mention public keys and private keys when talking about Bitcoin and crypto wallets. These terms are common in the blockchain world, but not everyone knows what they are or how they’re different.
The role of private and public keys centers on managing communication between a sender and a receiver. When it comes to the blockchain, a unique cryptographic key is used for encryption and decryption, which is important when you send and receive Bitcoin from your crypto wallet.
So join us as we explore the differences and similarities between public and private keys and their functions in the blockchain market.
Let’s start with public keys. What are they, and how do they work? Public keys are used to encrypt data on the blockchain. While advanced users can create public keys through specific software, they are usually provided by a reliable source - something like a Bitcoin wallet.
Public keys are used to authenticate a signature or encrypt messages. However, the way they’re used with blockchain technology is significantly different from the way private keys are used. While private keys typically work as a single decrypting component, public keys have two functions: encrypting and decrypting data.
These keys use what’s referred to as an asymmetric mechanism. This is an algorithmic mechanism that allows for two different public keys to encrypt and decrypt messages. One key encrypts the message, while the private key is used to decrypt.
You might hear private keys referred to as secret keys, but they’re the same thing. A private key is used to decrypt data sent between two users, but only the correct private key has permission to do so. Think of a private key as a password that consists of numbers and letters.
Usually, when you create your Bitcoin wallet, a random private key is created, establishing a sequence that’s not easy to guess or hack. Private keys are very long, which makes it very difficult for an outside attacker to access the data the keys are protecting.
We’ve established that private keys play a huge part in keeping data secured. However, there’s more to a private key than encryption. The purpose of a private key largely depends on the application in which it’s used.
Private keys offer digital signature confirmation, verification, and authorization. To do so, private keys use encryption to create random key pairs. These pairs secure private keys online in the cloud or in an offline app.
Next, the private keys watch for public keys within the application that match the digital signatures. When this process is finished, the public keys use the private key to decrypt the information. However, keep in mind that only the owner of the private key can decrypt the data with the aid of the public key.
There are plenty of advantages to using private keys to encrypt data. Here are a few reasons to use a Bitcoin wallet that employs private keys:
Private keys are perfect for sending and receiving data because they work so well with the existing blockchain technology. Because of this complementary relationship, private keys are ideal for sending and receiving data in a safe, secure, fast, and convenient method.
Using private keys provides additional features and services that enhance the security of data transactions. This is one of the key reasons private keys are so appealing to encryption.
One last reason to use private keys is the convenience and speed it offers encrypted transactions. Using private keys is significantly quicker than other encryption methods.
Both public and private keys are instrumental in providing encryption for Bitcoin wallets. However, the pair differ in several different ways. Both play significant roles in regard to blockchain technology, but understanding the difference between them is important.
A considerable difference between private keys and public keys is their primary functions. For example, is ideal when it comes to system speed, scalability, and security. On the other hand, public keys are great for load testing. The two work best together on the blockchain, though, as one requires the other to send and receive encrypted transactions.
The mechanisms public keys and private keys use are also different. Private keys are needed to both encrypt and decrypt information. That means it’s shared between the receiver and the sender of the transaction. By comparison, the public key is only used to encrypt data. It needs a private key to decrypt the transaction.
When it comes to speed, public keys and private keys are vastly different. A private key is markedly faster than its public key counterpart.
The last difference on our list focuses on how private keys and public keys handle privacy and security. Using private keys allows for confidentiality as it is only used to perform transactions between senders and receivers. Unfortunately, the same can’t be said for public keys, as they are available for anyone to view and use.
Now that you have a better idea of public and private keys and how they work, you have an idea of why it’s important to protect your keys. You can do this by using our Bitcoin Depot app, which has a built-in non-custodial wallet. With a non-custodial wallet, you’re in charge of your keys and your funds.