If you’re thinking about getting a crypto wallet, you might hear that it comes with two keys; a public key and a private key. Both are essential and perform different and complementary jobs.
Analogy 1: "To send you a secret message, I use a public key to lock the message so nobody can read it, and you use a private key to unlock the message so that you can read it."~Auth.com
Analogy 2: "Bob wants to send Alice an encrypted email. To do this, Bob takes Alice's public key and encrypts his message to her. Then, when Alice receives the message, she takes the private key that is known only to her in order to decrypt the message from Bob." ~Preveil.com
Analogy 3: "Some people describe public keys as the same thing as looking up a company’s address on the Internet. Anyone can look up that information and share it as they wish. Each public key is paired with a private key. Using our company address analogy, the private key is like the key to that company’s front door. The public knows the company's location because the address (public key) can be easily found. But only people with a key to the front door of the building (private key) can gain entry." ~Simplilearn
Public Key
A public key allows you to send and receive cryptocurrency transactions. It is usually paired with a private key.
Anyone can send transactions to a public key but one will need a private key to access them. Private keys prove that you are the owner of the cryptocurrency in a transaction.
The public key is like an address and it’s stored on the blockchain. You can share it without any worries.
Some content creators or charity pages usually have their crypto addresses put up to receive donations. While anyone can donate, you will need the private key to unlock the donated funds.
It works the same way banks do. You can share your bank details to receive money but only you can access the money using your PIN.
A public key is also like an email address. Anyone can have it and send emails to your address. This information is public but it doesn’t mean everyone can access the emails in your inbox.
Private Key
Your private key is like your PIN and should not be shared with anyone. It belongs to the owner only.
A private key gives you access to the funds you have received at your public address. For instance, when someone sends you say, one ETH, you will require a private key to unlock the transaction and prove that you are the new owner of the Ethereum.
Private keys can be in these forms:
A QR code
A 64-digit hexadecimal code
A 256-character binary code
A mnemonic phrase
Regardless of the type, the private key is normally a large number for good reason. Many users prefer a “seed phrase” or “secret recovery phrase” to protect their wallets.
You can generate a public key with a private key but the same can’t happen vice versa. You can also have several public keys from one private key.
The private keys are in the cryptocurrency wallet and not on the blockchain network. If someone gets hold of your private key, they will have access to the cryptocurrency in your wallet.
Be sure to keep your private key safe as it is difficult to recover when lost or when it gets into the wrong hands.
However, if you keep your crypto in an exchange wallet such as Binance or Coinbase, the company holds your private key for you and can control your funds on your behalf.
When choosing a custodian, be sure to go for a trusted company that is known for high security and regulation.
How Public and Private Keys Work Together
When you own cryptocurrency, you will have a private key to prove ownership of it. Anyone can verify you as the owner with your public key since it’s stored on the blockchain.
The public key encrypts transactions which can only be decrypted by the corresponding private key using public-key cryptography (PKC) or asymmetric cryptography.
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