Cryptocurrency primarily enables peer-to-peer transactions, without the involvement of third parties like banks or centralized authorities. But, how could someone trust fund transactions on blockchain not being monitored by anyone? Well! Here the Public and Private keys play the role by serving as crucial elements of secure and transparent crypto transactions. But what on Web3 is that exactly? This blog provides a detailed overview of public and private keys and their significance in the crypto world.
What Are Public and Private Keys?
When you create an account in a multicurrency chat and pay wallet, it automatically generates a set of keys- Public and Private. Both are generated using the cryptography method – used to encrypt and decrypt the information being shared between the peers.
Although public and private keys serve different purposes, both are equally important to complete any transaction.
While the Public key enables users to receive the crypto transactions, private keys allow them to prove their ownership and access the funds associated with the public address.
Here is an example:
- Jack wants to send crypto to Rose.
- Jack asks Rose for her Public Key, which generates an address.
- Jack sends the funds to the address associated with Rose’s Public Key.
- Rose, the recipient, uses her Private Key to access the funds associated with the address created from her Public Key.
How Public Key Is Different From The Private Key?
Here are some key differences between the public key and the private key:
Public Key: Public keys use an algorithm to encrypt data. They are typically used for encryption and verification purposes.
Private Key: Private keys use algorithms for both encryption and decryption. These keys are closely held and used to decrypt data encrypted with the corresponding public key.
Public Key: Public key operations are computationally intensive and slower compared to private key operations. This is because the algorithms used for public key encryption are more complex.
Private Key: Private key operations are faster as they involve simpler symmetric encryption algorithms. This makes private keys more suitable for bulk data encryption.
Public Key: Public keys are freely available and used by anyone who wants to send encrypted data to the key’s owner. They are designed to be publicly accessible and don’t need to be kept secret.
Private Key: Private keys are kept secret and should only be known to the sender and receiver. Sharing a private key with unauthorized parties compromises the security of the data.
Public Key: Public keys are part of asymmetric encryption, where different keys are used for encryption and decryption. The public key is used for encryption, and the private key is for decryption.
Private Key: Private keys are used in symmetric encryption, where the same key is used for encryption and decryption. This makes symmetric encryption faster but requires a secure method for sharing the key.
Public Key: Public keys can be freely shared with multiple people. When you want someone to send you encrypted data, you give them your public key. They can use it to encrypt data that only you, with your private key, can decrypt.
Private Key: Private keys are shared only between the parties involved in the transactions. Sharing a private key with unauthorized individuals would compromise the security of the encrypted data. Therefore, private keys are not typically shared.
Private Key and Seed Phrase: Are They Same?
Though private keys and seed phrase serves different purposes, there are some things in common. Private keys are used to execute the crypto transaction on a blockchain network, and a seed phrase is used to recover the chat wallet. If a user loses their private key or access to the wallet, they can regain access to their funds using the seedphrase. Despite the role, both must be protected, otherwise one can end up losing all their crypto funds.
Public and Private Keys: Benefits
Authentication – Public key cryptography provides a secure method for verifying digital identities online. It enables entities like websites, email senders, and software publishers to prove they are who they claim to be.
Confidentiality – Public key cryptography enables secure, private communication between parties. Data that is encrypted with the recipient’s public key can only be decrypted by the recipient’s corresponding private key. This cryptographic process ensures that only the intended recipient can access and read the decrypted contents, thus maintaining confidentiality.
Data Integrity – Digital signatures, enabled by public-private key pairs and cryptographic techniques like hashing and encryption, validate the authenticity and integrity of messages, documents, and files. They ensure data has not been tampered with or altered since being digitally signed.
Non-repudiation – By using digital signatures tied to a private key, parties can cryptographically prove they are the source of data. This prevents the sender from denying or repudiating the data, as long as they keep their private key secure.
While the Public key provides the foundation for strong encryption and data security online, the private key proves identity and allows data to be decrypted. Together, they enable confidential communication and validate digital signatures. With public and private keys, individuals and organizations can encrypt sensitive data, authenticate themselves on networks, and digitally sign documents or transactions. Leveraging this powerful cryptographic innovation allows all of us to transact in crypto privately and securely.