Let's talk about keys...
Today, we'll go over crypto wallet terminology like public and private keys, wallet addresses, and seed phrases.
To a beginner, crypto terms like private keys and seed phrases can sound like mumble-jumble. Let us try to understand in the simplest way possible.
Consider your cryptocurrency wallet to be a house. Every house has an address as well as a key to open the main door. A wallet address, public key, and private key are all part of a cryptocurrency wallet. Someone who wants to send you a postcard must know your home address in order to do so. Similarly, if someone wants to send cryptocurrency to your wallet, they must first obtain your public key.
A private key, on the other hand, represents the key that unlocks your home. Your private key should only be accessible to you.
• What exactly are public and private keys?
• What exactly is a wallet address?
• What exactly is a seed phrase?
What is the difference between public and private keys?
Your crypto wallets have two types of keys. Consider another example. When we compare your cryptocurrency wallet to a bank account, the public key is similar to the account number. It can be distributed to anyone in order to receive funds. A private key is analogous to a PIN or verification code. It is not permitted to be shared with anyone.
A public key is a cryptographic code that allows users to receive but not send messages, coins, or tokens. It is a lengthy string of alphanumeric code used to encrypt data.
To receive cryptocurrencies into your wallets, you can share your public key with anyone.
A public key infrastructure server stores public keys. They are used to securely encrypt data before it is sent over the internet.
A private key is also a long alphanumeric code that makes data hacking difficult. It is also referred to as the secret key, which is used for authentication and decryption. A private key is required to gain access to your cryptocurrencies.
Public and private keys are always in pairs. They only communicate in one direction. A private key can generate a public key, but not the other way around.
When a public key is used to encrypt data, a private key is used to decrypt it. You will lose access to your crypto wallet if you lose the private key.
What exactly is a wallet address?
It's natural to believe that your wallet address and public key are the same thing because both can be used to receive funds. But they are not the same. Let's look at what a wallet address is.
A crypto wallet address is a string of numbers and letters that is generated at random. It is a single, distinct number. You can share your wallet address to receive funds in the same way that you can share your public key.
Your public key generates a wallet address by using cryptographic functions.
The wallet address is a shortened version of the public key that can be sent as an address. This is also a one-way street. The public key cannot be generated using your wallet address.
What exactly is a seed phrase?
When you want to access your funds or send them to someone, you must enter your long-form private key. To extract private keys, a human-readable format was created.
To access funds, a seed phrase is a series of 12 to 24 readable words generated by the crypto wallet. This is your crypto wallet's master password. As long as you have a seed phrase, you can access all of your funds in the wallet.
If you misplace your wallet, the seed phrase will assist you in recovering it. Back up a copy of the seed phrase when you first set up your crypto wallet. Your seed phrase, like your private keys, must be kept secret.
Seed phrases are also known as mnemonic phrases, mnemonic code words, mnemonic seeds, seed words, backup seeds, recovery phrases, and other similar terms. Using your seed phrase, you can generate a private key.
Here's an example of a seed phrase:
To summarize, a seed phrase yields a private key. The corresponding public key is derived from the private key. The corresponding wallet address is generated by the public key. Furthermore, all of this is a one-way street.
I hope this helped you understand the terms associated with a cryptocurrency wallet.
before you invest in crypto – invest in yourself