Typically, the private and public keys together form a key pair which you will need all the time.
However, you may share your public keys with others in order to receive coins and funds to your wallet and that is why it is called the public key. This key is necessary for identification purposes.
On the other hand, the private keys, just as the name suggests, are private, and therefore, it is needed to keep them a secret. These keys are needed for encryption and authentication.
In order to use your private and public keys safely and properly, you will need to know the differences between them not only in their features and functionalities but also in the ways they work and may affect your crypto operations, should anything untoward happen.
This article will tell you all about it to make you more knowledgeable and make sure that you know the significance of each and act accordingly.
Crypto Private Key vs Public Key – The Differences
As the world moves towards digital payments and the transfer of money, safety and security during the process is the most important factor that people worry about.
However, provided you use them sensibly and responsibly, a public key and private key will ensure that.
Though you can share the public key with others, if anyone else has access to your private keys, they will also have access to your crypto wallet and funds and can even steal your money.
There are also a few other differences between the public keys and private keys that you should know in order to use them both safely.
All these differences are enlisted here in this article for your knowledge. Here it goes.
Typically, a public key is that which will allow you to receive a crypto transaction. It is built with a cryptographic code and is paired to a specific private key.
It can be shared with others so that they can send the transactions to it. Ideally, the public key is an address to which the sender sends the funds. In very basic and simple terms, this address is just the shortened form of the public key.
On the other hand, a private key is that which you will need in order to unlock the coins that you have received through a transaction.
The private keys are generated and stored automatically by the blockchain for you.
The software uses the private key to sign the transaction digitally when you send crypto coins from your blockchain wallet without actually disclosing it.
This sends a message to all the participants in the network that you are the one who owns the coins and have the sole authority to transfer the funds.
The private key is primarily used for encryption and decryption purposes. This key is much faster than the public key and is symmetric.
The other purposes of the private key are to ensure the reliability and security of the system on the whole. The private keys also enable the users to sign their message so that the receiver knows that the message is from you and can be sent only by you.
The public key, on the other hand, is the particular key that is used for encryption purposes. This means that it converts the plain text into cipher text.
The hashed version of the public key represents the address of your wallet. The main purpose of the public key is to check and ensure the sustainability of the system.
The public key also enables the users to confirm a signature that is signed by using the private key.
The encryption of the private key is also referred to as symmetric key cryptography. This means that a single key is used in this type of cryptography by both the receiver and sender during the transfer of information or while communicating.
However, the sender sends the encrypted plain text to the receiver as ciphered text via the communication channel. The receiver then uses the same key to decrypt that ciphered text to get back the plain text on the other end.
Therefore, the private key is known to the two people involved in a transaction only during the communication.
On the other hand, public key encryption is called asymmetric key cryptography. There are two related keys used in this case, the public key is used to encrypt and the private key is used for decrypting.
Both these keys are different and though you share the public key with others and everyone may know about it, it is only the one who holds the related and unique private key that will be able to decode the text. This increased the safety and security aspects.
Choice of Encryption Method
Your choice of the encryption method of the public key or private key will vary according to your convenience and preference.
Typically, you should choose a symmetric encryption method if you want data protection and higher transfer speed more than anything else.
For example, several major companies such as Microsoft and Apple use the AES or the Advanced Encryption Standard symmetric encryption algorithm. Symmetric data encryption is also an ideal choice for those who emphasize on data storage.
On the other hand, an asymmetric cryptography or encryption would be an ideal choice if you wish to boost up the security of the system more than its computing power and speed.
You can also choose it when identity verification is your priority because you will not get this support from symmetric cryptography.
Typically, all crypto traders and investors prefer this particular type of encryption because the blockchain technology is primarily based on identity confirmations before authorizing a transaction.
Since no methodology or encryption is perfect, there are pros and cons of both the public and private key encryption technologies.
One of the most significant benefits of private key encryption is that it provides businesses an excellent way to protect their important and sensitive information and data from the prying eyes.
And, being symmetric, it needs less computer resources for operation and offers a high level of security as well.
On the other hand, the significant benefit of the public key is that it does not pose any significant risk to the system even if you share it with several parties or even make it viewable to the general public. You must have seen several charities do so.
The major limitation of private key encryption is that there is a notable issue of key transportation.
The forms of communication used to transmit the key seem to be less secure and it is therefore quite risky to allow access to any third party to the key to unlock the data.
Also, there may be some doubts or disputes regarding the authenticity and origin of the message which is not guaranteed by the key.
Moreover, you will need to generate several private keys and manage them if you want to separate the funds or data among different groups.
This will not be very convenient and will also cause an enhanced insecurity when you share a new key with each of the different parties involved. And, if you lose the private key, you lose your crypto coins.
On the other hand, the downside of the public key is that it will need a user to have two sets of keys in order to receive the fund and decrypt the data.
This is because the public key encryption is usually related mathematically with the corresponding private key.
Which is Better – Crypto Private Key or Public Key?
Ideally, it is supposed that the public key encryption helps the most in maintaining the security of the system but the private key also plays its part significantly well in that particular matter.
You will need both the public key and private key for transacting your crypto coins and therefore you really cannot say one is better than the other.
The differences between them mentioned above must have already made it clear to you but if you still need some more information regarding these two keys, here they are.
Ideally, both public and private keys are subsequently similar to your email address and password, respectively.
However, the goal of these two keys is to ensure and prove that the transaction spent and received was not forged but was signed duly by the owners of the funds.
The symmetric and asymmetric cryptography concept relies on the combination of science and technology.
Since there is no lock-and-key mechanism involved in cryptocurrency storage and transfer, it is needed to be made secure digitally by using mathematical algorithms.
Today, this is made even more secure by the use of quantum cryptography.
In this process, a series of photons from the sender is sent and it passes through a polarizer or a beam.
This polarizes the sequence into a string of data.
When the receiver receives this chain of data, it is decoded and sent back to the sender by the receiver.
In this process only those photons are considered for transmitting that are not intercepted and the others are rendered useless.
This eventually ensures ultimate protection of data and safety to the system.
In the crypto circuit, if you do not own a private key, you do not own crypto, even if it logically belongs to you.
It is nearly impossible to prove your ownership if you lose your private key.
Therefore, you should store your private key safely since it is the only means by which you can access your crypto coins.
As for the public keys, you can have one or several of these but they should be related to each private key.
And, if you lose the public key, you can recover it provided you have the private key with you.
However, the converse is not true, as said earlier.
The concept of public keys and private keys are based on PKC or Public Key Cryptography.
These keys protect your system and crypto account from the malicious actors and eavesdroppers since they cannot gain access to it without the keys.
All private communications are made secure with the use of a digital signature.
In this case, even though you hold the private keys, it is likely that you will never handle them directly.
This is because the functionality and configuration of the crypto wallets will allow it to handle them on your behalf automatically.
Normally, in such situations, you will be given a seed phrase. This, typically, encodes the private keys and you should store it as a backup.
However, if you intend to store your crypto coins on the crypto exchange, then the exchange becomes the custodian of the private key.
In this case, it is your plain and simple trust on the exchange as it is with your bank where you hold your gold in a rented locker or vault.
No matter what, both the private keys as well as the public keys are necessary for a crypto trader and investor to control their coins and funds.
These keys work in tandem and it is therefore necessary to know how cryptocurrencies function so that you can use them both accordingly.
Ideally, when you say that you own cryptocurrency you actually refer to the private key that you own.
This key, in turn, will allow you to prove ownership of your coins and control them while making a transaction.
And, since it is stored on the blockchain, your ownership of the coins can be verified by anyone by using the public key.
Whether you would hold your own keys or trust a custodian is entirely your choice and depends on several factors such as your risk tolerance, your philosophy, and more.
If you choose to hold your private keys then ensure that you use a modern HD wallet. This will do a great job in managing them.
On the other hand, if you choose to use a custodian for that matter such as a crypto exchange then you must make sure that the exchange is reputable and trusted.
Also, choose a crypto exchange that prioritizes regulation and security more than anything else.
The public key has several other applications apart from encrypting information and data.
It can also be used in SSL or Secure Sockets Layer protocol. This ensures making a secure connection to websites.
Apart from that, a public key can also be used to generate a digital signature in Red Hat Linux packages distribution, Ubuntu, or any other operating system.
Also, you can use the public key to enable key agreements that are password authenticated.
In this process, cryptographic keys are created by two or more parties involved in the deal and it is protected by one or more passwords.
In addition to that, a public key is also used in quite a lot of other data formats and protocols characteristic to different system software and applications such as:
- Open PGP
- Digitally signed PDFs
- S/MIME and more.
Most software programs such as browsers also use this key which ensures that a connection is secure even in networks that are not secure.
There are several business benefits of using a key for encryption and decryption of data.
First, the person receiving the data is given the assurance that the data is exactly what the sender claims it to be.
Therefore, the receiver has more confidence about the authenticity in and integrity of the data.
Second, the recipient also knows that the data or the content is not and cannot be seen or reviewed by anyone else, as it is intended, since no one else has the private key.
Third, due to the enhanced security aspect while data transmission, it ensures that the message has not been changed midway.
This can be ensured by checking whether the received message matches the sent message, which is a part of the process.
And finally, the receiver can also be sure that the message is sent by the person expected since it will be digitally signed by the sender.
Any web content can be signed digitally by using the private key of the user and can be verified via the public key. This provides a lot of distinct benefits such as:
- Integrity and
- Non-negation or non-denial.
In addition to the above, any message that is encrypted assures privacy and prevents unauthorized access.
This is because nobody, apart from the two participants, knows the public key is paired with the private key.
If you ensure that these are inaccessible to others, the chances of cyber frauds and the probability of an unauthorized interception will be reduced significantly, if not eliminated completely.
To wrap up, it can be said that crypto trading is hard, but ensuring the security of your funds and the safety of your transactions is even harder, especially if you are new in this field.
However, it is very important that you do so because in that way you will not only safeguard your data but will also respect privacy and build trust, and these keys will ensure that.
You will be able to protect your data from being hacked, lost or stolen while making a crypto transaction with proper use of private and public keys. However, you will need to know the differences between them first from articles like this.