What Is the Difference between Private and Public Key in Cryptocurrency
If you have been using Bitcoin or any other altcoin based on Bitcoin’s design, then you must be familiar with the terms Private key and Public key. After all, both are required to do a successful cryptocurrency transaction.
Many find it hard to make sense of these two terms as both deal with complex encryption. To understand the two different types of keys used in a cryptography transaction, you must first understand the basics of a cryptocurrency transaction. The word cryptocurrency signifies that it is something that has to do with cryptography.
The Sender Encrypts the Transaction
To explain the concept in much simpler terminology, imagine if you want to send your friend some money or a package. It has to be done privately without third parties having a chance to open the package. At first, you need to know the address of your friend – this is the Public key of the recipient.
Now you must make sure no one peeks inside the transfer. So you encrypt or lock it with your friend’s Public key so that it gets delivered to that address.
The Transaction Gets Delivered To the Public Key ID
Once your friend gets the package, he/she can open the package with the right key. This key that your friend uses to unlock the package is called the Private Key.
The most important thing you have to understand is how your friend will have the key to unlock the package in the first place.
The Recipient Uses the Private Key to Decrypt the Transaction
The answer is yet again simple, the public address of your friend is a modification of his private key. So you are actually encrypting the package with your friend’s public key which is derived from his private key.
Decentralized identity wallet transmits a registration payload that includes a public key to the #Blockchain, generating a unique identifier. During authentication, the private key is stored in the user’s identity wallet, enabling users to create their own digital identity.$KEY pic.twitter.com/GGNnNORWCA
— SelfKey (@SelfKey) May 13, 2022
So he/she can easily open the package and view the content inside.
Note: It’s nearly impossible to crack a public code to know the private key as the level of encryption is very hard to retrace.