What is a Bitcoin Private Key?
A bitcoin private key is a randomly generated number that allows bitcoins to be spent. Learn more about bitcoin private keys and how they're used here.
Private key in the physical world
There are closed and open keys - let's look at an example. To do this, consider a mailbox where you get ordinary mail. It has a one-of-a-kind address and if someone has to deliver a letter to you, they have to know it in order to do that. And you have a real physical private key that you use to open the box and take the contents. For security purposes, you always keep track of your key and don't let strangers get their hands on it.
Just like your house or apartment number, anyone in the bitcoin world can know your public address in the blockchain in order to send you currency. And in order to unlock (spend or send) those bitcoins, you will need your private address (or key), which you are fully responsible for, just like a physical mailbox key.
Read more: What is Blockchain?
What a Bitcoin private key looks like
A private key is a secret password or number made up of numbers and letters that is used for all financial transactions on the blockchain network. It is a 256-bit number that is randomly generated at the time of wallet creation. The level of uniqueness of the key is determined by cryptographic technologies - there are no failures in this process.
The personal key looks like this:
Read more: Block in Blockchain
What is a public key in Blockchain (Bitcoin)?
This is another long number also from different characters, which is obtained from private keys only using cryptographic calculations. It is not possible to reverse engineer and retrieve the private key from which it was generated. This address is used to receive bitcoins publicly.
This is what a Bitcoin public address looks like:
What Bitcoin private keys are used for
Private keys are used to perform irreversible transactions. This irreversibility is guaranteed by cryptographic signatures that verify, validate and preserve each transaction. And for each transaction, these signatures are unique, even if they are generated from the same private keys. This feature makes them impossible to duplicate. Users can use their private keys an infinite number of times.
This key serves to confirm that you are the owner of a specific cryptocurrency address. When you have control over a private key, you can make a transaction and use the funds tied to that address. A private key is something you should never share with an individual or entity; that's why it's called "private"
Read more: Bitcoin
How a private key works
A private key is simply your way of saying, "This address is mine and I have access to it. Coins are stored in the blockchain, not in your private key. Keys are stored in wallets and therefore coins are NOT stored in a cryptocurrency wallet - a common misconception.
You don't necessarily need extra storage for your keys. However, it is reckless not to take any security measures - it is still advisable to keep your personal keys in a safe wallet.
To make a cryptocurrency transaction, you need to prove that you own the address. This is confirmed by the fact that you are the owner of a private key. It may seem strange that you have to provide such important information to prove it, but this private number is never broadcast anywhere. Making a private key public is damaging the privacy and encryption that underpins any blockchain.
Wrapping up the review
In essence, a private key is like a pin code from a credit card or a password from an online banking account - only more complicated. While a pin code can be hacked or picked, the same cannot be done with a private key. Nevertheless, the more assets you have in your accounts - the more desirable a prey for intruders, so keep your private keys in the wallets, which in turn are protected by a seed-phrase, numeric or alphabetic password.