Blockchain technology is built upon a foundation of cryptography – the encryption of addresses and other information using sophisticated computer operations. Cryptography is a key element in making crypto transactions secure – that’s why these digital assets are called cryptocurrencies.
Your access to the blockchain is based on a particular system called public-key cryptography.
Public Key vs Private Key
This system starts with your public key, a long series of numbers and letters that serves as your account number in interactions with the blockchain that underlies a cryptocurrency. Data that is intended for you is encrypted with your public key before it is posted to the blockchain.
Senders use your address – a shorter series of numbers and letters that is derived from your public key – to send you funds on the blockchain.
And what is a private key? You can think of it as a password to give you access to your account. The private key decodes information that is intended for you and posted on the blockchain, giving you access to data and crypto funds. Your Bitcoin private key gives you access to assets on the Bitcoin blockchain. If you own crypto on other blockhains such as Ethereum, you will have more private keys.
A single private key is typically 256 binary digits long, and it is most often expressed as a series of 64 numbers and letters like so: D88C 5E31 8005 A994 C378D 9021 66E9 04E2 69CA 3860 8DBB E274 884F 3010 F004 C08C.
One of the reasons private keys are secure is that there are so many possible combinations of numbers and letters. In fact, there are 2 to the 256th power combinations, or about 1.16 x 10^77. For comparison, astrophysicists believe there are about 10^80 atoms in the entire universe. Mathematicians estimate that guessing a single private key by trial and error would take a fast PC about 325,000,000,000,000,000 years.
If you manage your crypto affairs with a wallet, the wallet uses your public and private keys to receive funds, send funds, and check your balance. If you entrust your crypto account to a custodial entity like Kriptomat, the custodian manages your public and private keys on your behalf.
There you are! A private key definition you can rely on.
This text is informative in nature and should not be considered an investment recommendation. It does not express the personal opinion of the author or service. Any investment or trading is risky, and past returns are not a guarantee of future returns. Risk only assets that you are willing to lose.