Table of contents
- What is a crypto wallet?
- What is a private key?
- What is a public key?
- What is a Bitcoin address?
- Do Bitcoin addresses and private keys mean the same thing?
One need not be a Bitcoin expert to be confused by the distinction between private and public keys. Learn the basics before you dive in.
If you’ve ever dabbled in Bitcoin, you’re familiar with crypto wallets and the concepts of private and public keys. What are they, though, exactly?
We’ll break down the distinctions between your private and public Bitcoin keys and explain how they work together to secure your transactions.
What is a crypto wallet?
A cryptocurrency wallet is a digital wallet that stores manage and facilitates the transfer of digital currencies. The wallet stores your private and public keys, allowing you to access your cryptocurrency holdings safely.
There are two main categories of cryptocurrency wallets: non-custodial wallets, in which you retain complete control over your private keys, and hosted crypto wallets, in which the platform itself acts as a custodian. Some people feel more comfortable using a hardware wallet since the private keys are kept in an unconnected location. They all have one thing in common: you may use them to store your cryptographic keys.
What is a private key?
To deal in cryptocurrency and verify one’s possession of said coin, one needs a private key, which is a secret code. A mix of letters and digits represents the 256-bit string used in Bitcoin keys. A Bitcoin wallet is a digital wallet that stores and secures your Bitcoin so that you may quickly transfer or spend your Bitcoin at any time.
What is a public key?
In contrast to a private key, a public key is meant to be shared with the world so that others may give you bitcoin. A holder’s private key is “locked” to the public key, so only the holder may “unlock” it. Bitcoin addresses are compressed public key copies and are sometimes used instead.
Think of a public key as your home’s address and a private key as your set of keys. You’ll need to give out your address and home keys if you want people to visit, but they won’t be able to get in without them. Or, in this case, it’s imperative that you.
What is a Bitcoin address?
A Bitcoin address is a 26-35 character string that identifies the recipient and sender of Bitcoin transactions. If you need a Bitcoin address for a transaction, your cryptocurrency wallet may quickly generate one for you. The use of a newly developed Bitcoin address is recommended for each transaction for security reasons.
Do Bitcoin addresses and private keys mean the same thing?
Not at all. Never give out your Bitcoin private key to anyone, but feel free to give out your Bitcoin address to anyone who wants to send you some cryptocurrency. The Bitcoin address is a hashed version of your Bitcoin public key that may be used in transactions.
How to transmit Bitcoin with a public key
It’s simple to send money to someone using Bitcoin:
- Make sure your Bitcoin balance is sufficient to cover the amount you wish to transfer and that you’ve chosen the correct currency.
- Enter the Bitcoin public key or address of the receiver into the “Recipient” section of your wallet. (Remember that there may be minor linguistic variations across wallets and platforms.)
- Make sure you input the public key correctly. If you accidentally send Bitcoin to the wrong public key, you will likely lose it forever.
- Input the sum you wish to transfer.
- Finish by hitting the send button.
How to acquire Bitcoin with a public key
These are the steps you must take if you wish to get Bitcoin:
- Find your public key by opening your cryptocurrency wallet and clicking “Receive” (the specific language used may change depending on your wallet).
- Provide the sender with your public key.
- Relax, as Bitcoins are transferred to your wallet.
How to keep your private key safe
Protecting your private key is the most critical thing you can do to keep your Bitcoin secure. Your private key should never be given out. Remember that just your public key or Bitcoin address is needed for a transaction to be completed by another party. It’s best practice to store your private key somewhere that isn’t connected to the internet, away from prying eyes. Hardware wallets are an extra-safe offline storage option for those who are paranoid about losing their digital assets. Since you aren’t giving out your key to a third party, they’re immune to hacking.
It’s a good idea to make a copy of your private keys in case you ever misplace them. Your choice of cryptocurrency wallet will determine the backup options you have. Your private key may be safeguarded in three primary ways:
- A seed phrase has 9–24 common words.
- An archive of your wallet’s files
- Storing an encrypted duplicate of the private key in a safe location
Bittrust IRA is the next step in your crypto adventure.
To learn more about taking advantage of this investment opportunity, don’t hesitate to contact us at Bittrust IRA or call us at 855-642-8800.