In crypto, the Public Key refers to the long string of letters, numbers, and most times alphanumeric that is used to send crypto to a blockchain address.
This is different from a blockchain address because the address is like the entire account while the public key is similar to just the account number.
To operate a blockchain address, you need both public and private keys i.e., public keys for getting crypto from other addresses and private keys to be able to use the crypto in those addresses.
Working
Public keys are based on a cryptographic method called asymmetric cryptography. This method uses two types of keys, a public, and a private key, to secure and manage digital assets.
When a wallet is created, a random private key is generated, which in turn generates a corresponding public key through mathematical functions.
To make it easy for people to remember, the private key is derived from a set of 12 to 24-word phrases called Seed Phrase or Key Phrase. When these phrases are hashed with a cryptographic function, they yield the private keys.
The public key is shared to receive assets, while the private key remains secret and is used to access or transfer those assets. A wallet address is derived from the public key and serves as the unique identifier where users can send cryptocurrency.
The Importance of Public Keys in Blockchain Security
Public keys are critical to the security and integrity of blockchain networks. Here’s why:
- Ensuring Transaction Validity: Public keys work with private keys to validate transactions. When a transaction is signed with a private key, the corresponding public key can verify that the transaction is authentic and hasn’t been tampered with. This also ensures you know that a transaction was successful when you send crypto to someone.
- Transparency With Privacy: While public keys are shared and help verify transactions, they do not reveal the identity of the key holder. This provides a degree of privacy, as others can see the public key and verify transactions but cannot directly link them to a real-world identity without additional information.
- Trust in Decentralized Networks: In a decentralized network like a blockchain, there is no central authority to enforce security. Public keys establish trust by allowing participants to verify each other’s transactions. This decentralized validation builds trust among users and supports the network’s security and integrity.
Through their essential role in transaction validation and transparency, public keys strengthen the blockchain’s security, making it reliable and trustworthy for users around the globe.
Common Misconceptions About Public Keys
Public Keys Don’t Hold Cryptocurrency
One common misconception we have seen is that, unlike a bank account which really holds the money, public keys do not hold cryptocurrency. A cryptocurrency never leaves its blockchain, even when it is burnt or bridged.
In reality, a public key only serves as an identifier linked to your wallet.
Public Keys and Wallet Addresses Are The Same
Although a wallet address is derived from a public key, they are not the same. The wallet address is typically a shortened version of the public key, designed to be more user-friendly. Understanding this distinction helps avoid confusion in transactions.
Sharing Public Keys
Just because it is named a key, it doesn’t mean it gives access to your funds.
Unlike a private key, a public key is safe to share. Its very purpose is to act as an identifier, allowing others to send you crypto and verify that you own a certain wallet without risking security.
