A private key is like a password; A password that is generated for you, and should be used by only you. Private keys are made out of a string of letters and numbers. When you buy cryptocurrency like Bitcoin, for example, the private key unlocks the digital vault that holds all your money. Private keys are meant to represent ownership of the cryptocurrency and the transactions made with that cryptocurrency. Their role is to sign & authorize any transactions (like a digital signature) made by YOU so it is vital to keep your private keys to yourself!
A public key is generated through your private key via a series of complicated mathematical algorithms, which as a result, becomes a matched pair. This also allows public keys to be recreated through private keys if they are lost. But, it should be known that private keys cannot be recreated through public keys. Public keys are used to facilitate transactions between users, allowing them to send or receive cryptocurrencies from one another. The public key is really long to read so it is instead compressed into a ‘public address.’
What is a Public Address?
A public address is basically a shortened version of your public key. This is what you share with others when you want them to send you Bitcoin or when you want to send them Bitcoin. The public address is similar to a bank account number. Whenever you need to send money to another person, you need their bank account number so that the money goes directly to them and not to someone else. Similarly, whenever you need to send money through Bitcoin, you would need the other person’s public address so that the money goes directly in their account. Keep in mind that you will need your private key to prove that you are part of the transaction.
Why are these keys generated?
Public and private keys are cryptographic innovation that make sending digital money safe and secure. Since blockchain technology is decentralized, it eliminates the need for a middle man like a bank to hold all your money. Instead, it generates public & private keys for you to access your money, by yourself, anytime, anywhere, as long as you have an internet connection. These keys are also needed for authorization when transferring money to others in order to prevent fraud. No more visiting banks and asking bankers to give you access to your hard-earned money, when you can have it stored in a digital safe, and have the keys to the safe with you at all times!