Updated: Feb 8
Public and private keys form an important part of how cryptocurrency works. The use of both allows the user to send and receive cryptocurrency without the need for a third party to verify the transactions. The public and private keys work together as a key pair.
What is a public key?
A public key allows the user to receive cryptocurrency transactions. We like to think of it as something similar to an email address. It is paired with a private key as a way to validate the authenticity of a transaction using asymmetric encryption. While anyone can send transactions to the public key, the private key is required to prove that you are the owner of the cryptocurrency being received in the transaction. To make a transaction the sender would use the intended receiver's public key to encrypt the transaction and the receiver would use their private key to decrypt it when it reached them. This is a very secure way to make transactions as only the intended receiver and holder of a specific private key can access it.
What is a private key?
If you make the comparison between a public key and an email address, then you could think of a private key as something similar to a password. The private key is a huge combination of numbers that allows you to prove ownership of the funds associated with your public key. This is why keeping your private key safe is crucial, as in the wrong hands somebody could use it to impersonate you and gain access and control of your funds.
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