| Key Takeaways |
|---|
| - Public and private keys verify that a transaction is legitimately signed by the fund owner, not forged. |
| - Owning cryptocurrency means owning the "private key." |
| - The private key grants spending rights to the associated cryptocurrency. It should always remain confidential. |
| - Each private key can be linked to one or more public keys. |
| - A private key can recover the public key, but the reverse is impossible. |
Public and private keys are essential components of blockchain-based cryptocurrencies, falling under the broader field of public-key cryptography (PKC), also known as asymmetric cryptography.
PKC enables state transitions while preventing reversibility, allowing users to prove ownership of a secret without revealing it. This one-way mathematical function makes PKC ideal for verifying transaction authenticity. The model uses two keys:
- Public Key: Like a lock (shared openly).
- Private Key: Like the key to that lock (kept secret).
How Public-Key Cryptography (PKC) Works
PKC relies on trapdoor functions—mathematical operations easy to compute in one direction but nearly impossible to reverse.
Example: Factoring large prime numbers would take a computer millennia. This complexity prevents forgery, as reversing a cryptographic signature requires solving an infeasible mathematical problem.
Core Concepts: Public vs. Private Keys
1. Purpose
PKC ensures secure communication over public channels by using digital signatures. For cryptocurrencies, it confirms that transactions are:
- Authentically signed (not forged).
- Executed peer-to-peer on a public blockchain.
2. Private Keys
Owning crypto means controlling a private key, which:
- Grants spending rights.
- Must remain confidential (like a password).
3. Public Keys
Derived from the private key, a public key:
- Can be shared openly (like an email address).
- Cannot reveal the private key (one-way relationship).
4. Address Generation
A single private key can generate billions of public keys (addresses). For example:
- Alice shares her public key to receive funds.
- Only Alice can access those funds using her private key.
How Cryptocurrency Transactions Work
- Signing: Alice uses her private key to digitally sign a transaction.
- Verification: Nodes on the network validate the signature using her public key and consensus rules (e.g., Bitcoin’s UTXO model).
- Security: Forging transactions is near-impossible due to PKC’s mathematical safeguards (e.g., Proof of Work).
FAQs
Q1: Can someone steal my crypto with my public key?
A: No. Public keys only allow receiving funds. Spending requires the private key.
Q2: What happens if I lose my private key?
A: You permanently lose access to the associated funds. There’s no recovery mechanism.
Q3: Are public keys truly anonymous?
A: They’re pseudonymous. While addresses don’t reveal identity, blockchain analysis can sometimes link them to real-world entities.
Q4: Why are trapdoor functions important?
A: They ensure that private keys can’t be reverse-engineered from public keys or transactions.
👉 Learn more about securing your crypto assets
Keep learning! For deeper insights into crypto security, check out this School of Block video.