Last updated: January 21, 2019
You want to better understand public keys vs. private keys. You have come to the right site. Lets begin by understanding how public keys work when it comes to crypto wallet hardware.
Public Keys vs. Private Keys - how do public keys work?
Public keys are used in crypto wallet hardware to accept payment from others. Just like the name ‘public’ they are to be shared with others and are not sensitive. No crypto funds can be sent with public keys only crypto can be received. You give public keys to people to receive a payment. Pubic keys are commonly referered to as a crypto wallet public address or bitcoin public address.
Public key example
Mark owes Brenda $500 USD for professional services. Brenda asks Mark to be paid in Litecoin. Mark agrees to pay in Litcoin and asks Brenda for her Litecoin wallet address (public key). Brenda sends her Litecoin wallet address (public key) to mark via text message. Mark receives Brenda’s text with Litecoin wallet address (public key) and sends her the $500 USD owed for professional services in LTC. Brenda checks here Litecoin wallet on her Trezor Model T hardware wallet and receives her payment almost instantly
Public Keys vs. Private Keys - how do private keys work?
Private keys are used in crypto hardware wallets to safely store digital assets. They are secret and not to be shown to others. Private keys are like you bank account number or credit card number but even more important as your crypo can be stolen with little to no recourse. Private keys hold your crypto like Ripple, Bitcoin, Stellar or Ethereum. Private keys are often refered to as a Bitcoin private address.
Private key example
Kyle needs a plane ticket to India and finds an online plane ticket site that offers discounts for payment in Bitcoin. Kyle books his flight to India from the USA for $1,000 USD and uses his Ledger Nano X hardware wallet to pay. First he enters the websites public address and $1,000 USD in BTC then he approves this transaction via his Ledger Nano X hardware wallet. This approval given by Kyle allows the private keys to release the $1,000 USD in Bitcoin. The private keys always remain private. Approval was given to release Bitcoin.
Public Keys vs. Private Keys - picture
How public and private keys work together
Public and private keys work together by doing math. Both keys are mathematically related meaning private and public keys are large random numbers that are strung together in a relationship. Your public key allows for receipt of bitcoin or cryptocurrency and your private key allows for the spending of bitcoin. A digital signature is created and issued by the private key to issue payment to a specific public address.
Public keys verifiy the message sent by a private keys digital signature. Math makes this digital transaction unique, trustless and it cannot be reused or modified. These are some of the greatest benefits of crypto and the blockchain.
We hope you have a better understanding of how public and private keys work. Remember to safeguard and protect your private keys at all times. Do share private keys when requesting payment as math makes it all happen.
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