Bitcoin Keys
Bitcoin uses cryptography for three main purposes; to secure transactions, to control the creation of additional units, and to verify the transfer of assets. To accomplish all of these things, Bitcoin relies on what is called
“Public-Key cryptography.”
Private Keys
In essence; a private key is for ownership access. This is what your wallet will store and this is what you want to keep safe. It is a secret alphanumeric number that will enable you to spend/send Bitcoin. You can think of the private key as your digital signature that unlocks the virtual vault that holds your money. You use it to confirm that you, the owner of the coins, approve the transaction or deposit address.
A Bitcoin private key is usually a 256-bit number, which can be represented a number of ways.Public + Private Key Pairs
If you have used Bitcoin at all, you have probably heard of a private key. Private keys are vital to the Bitcoin system. They are the mechanism for proving ownership of bitcoin.
This is what allows a user to authorize a transaction on the network. Private keys exist in many forms outside of Bitcoin for many purposes, and most people who are familiar with them from a previous experience would know them as a way to send encrypted messages.
A bitcoin public key is often represented in a QR code format
For every Private-key that exists in Bitcoin, there is a 1:1 relationship with something called a Public-key. As you can imagine, a Private-key is intended to remain private and shared with no one, under any circumstance.
A Public-key, in contrast, can be shared with anyone - there is no danger in me placing my Public-key on my website, for example, or to e-mail it to a client to receive payment for some activity. In this sense, you can think of Public and Private-keys like a username and password - one allows you to identify yourself, while the other allows you to prove you are that person.
Due to the 1:1 guarantee, Public and Private- keys share a cryptographic relationship that links them together. In Bitcoin, private keys produce a public key via an Elliptical Curve Digital Signature Algorithm or ECDSA. A private key that is an input for that algorithm will always produce its corresponding public key. However, the public key can never be reverse-engineered to produce its corresponding private key due to the one-sided nature of this algorithm.
A Bitcoin private key is usually a 256-bit number, which can be represented in a number of ways.
Why can’t I See my Private Key — but I Can Still Use it?
Given the nature and sensibility of Bitcoin private keys, you might never see one, even if you make millions of transactions. But how is this even possible if you can actually use the private key to sign a transaction? The best explanation is that most of the wallets we use nowadays are the result of BIP32 and BIP39 – BIP meaning Bitcoin Improvement Proposal.
BIP32 allows a wallet to generate multiple public addresses and corresponding private keys without requiring periodic backups, using elliptic curve mathematics, which allows computers to calculate public keys without revealing private ones.
BIP39 allows a wallet to create multiple public addresses with their corresponding private keys from a seed
This means that if you can see your 12 or 24-word seed, you are actually looking at the source of your private keys. Therefore, these seeds should always be kept in a safe place, away from the eyes of anyone else. This system presents a custodianship problem when it comes to Bitcoin inheritance, but for everyday purposes, it is relatively safe and sufficiently resilient for the average Bitcoin user.
Back up Seed phrase
A seed phrase; is the recovery phrase for your private keys. This 12 or 24-word English phrase acts as your backup password if you happen to lose, damage, or a technical failure occurs with your wallet. Your seed phrase is probably the single most important piece of information about your bitcoin because it serves as a fail-safe if anything goes wrong.
