Find out what are Private and Public keys? Transaction and Address (wallet address) in Bitcoin. How it works, the difference between a Private key and a Public key.
To better understand the Private key and the Public key, let's first learn about Bitcoin (BTC).
What is Bitcoin?
Bitcoin is the first digital currency in the world, successful thanks to the Blockchain technology behind it that enables transaction authentication to bypass intermediary costs. Bitcoin has now become very popular and probably no stranger to people.
How to get Bitcoin
- Trade with other people with cash or items in exchange for their BTC
- Bitcoin mining: You can get Bitcoin from the reward when digging 1 block or the fee to validate other people's transactions (transaction fee).
- What is Bitcoin in greater detail? Basic knowledge for effective Bitcoin investment
➤ What is Proof of Concept (POC)?
What is a wallet (Bitcoin wallet)?
E-wallets are software that allows you to store and receive cryptocurrencies like Bitcoin, Ethereum ... The wallet can store multiple coins and tokens at the same time, but most wallets will only support some currencies. certain coding.
These digital wallets will be protected by a private key or private key. This is a long hexadecimal code that links from your device to your digital wallet and to be able to use the money in your wallet, the code must match either the public key or the public key.
Similar to traditional banking applications, you can access to know your balance on many different devices and the risk only occurs when you forget your password or lose your phone.
Private and public keys are the two components that determine the uniqueness of a wallet.
What is a private key?
The private key is a randomly generated string of numbers and letters, allowing you to spend Bitcoin in your wallet. This is what you use to prove you are the owner of the address and allow you to send Bitcoin from your / Public key address.
A private key always starts with the number 5 and it is a series of numbers like this: 5Kb8kLf9zgWQnogidDA76MzPL6TsZZY36hWXMssSzNydYXYB9KF.
3 key features of Private key:
- First: A private key is a number represented by 256 Bit: In theory, we will have 2256 (~ 1077) private key, but in fact, Bitcoin uses a standard called secp256k1 ECDSA and makes the number sequence smaller than 1 a little but not significantly, it is still a large number in that range and makes it impossible to guess.
- Second: Your account will be lost forever if the lost private key: The private key can generate the public key, from the public key will generate the address (Bitcoin address) but the opposite process is impossible.
- Third: How to generate a Private key? A private key is considered valid when it is a representation in the form of 256 bits and satisfies the secp256k1 standard. Combining these two elements, we can write a random number generator script of 256 bits between 0x1 and 0x1 to 0xFFFF FFFF FFFF FFFF FFFF FFFF FFFF FFFE BAAE DCE6 AF48 A03B BFD2 5E8C D036 4140. So far we can understand How is the security of Bitcoin-related to the private key's serial number? Private is extremely important and needs to be kept confidential.
How does the private key work?
In cryptocurrency transactions, users are often provided with a public address and private key to send and receive coins and tokens. Public address is where the money is sent and received. But even if a user has a token deposited into his address, he can withdraw them without a private key. The public key (the public key) is created from a private key through a complex mathematical algorithm. However, it is almost impossible to reverse the process by creating a private keyword public key.
The private key is usually represented as a series of alphanumeric characters, making it difficult for hackers to crack. Most users represent their wallet keys in the wallet input format, which has 51 characters. Think of a public address as a mailbox and a private key is the key of the box. The postman, and any real person, can insert letters and small packages through the opening in the mailbox. However, the only person who can access the contents of the mailbox is the person who has the unique key. Therefore, it is important to keep the security key because if it is stolen or received without permission, the mailbox may be compromised.
A digital wallet stores the user's private key. Once the transaction is initiated, the wallet software creates a digital signature by processing the transaction using a private key. This maintains a secure system because the only way to create a valid signature for any particular transaction is to use a private key. The signature is used to confirm that a transaction has come from a specific user and ensures that the transaction cannot be changed once it is broadcast. If the transaction is changed, even a little, the signature will change.
If users lose their private keys, they cannot access the wallet to spend, withdraw money, or transfer money. Therefore, it is imperative to store the private key in a secure location. There are several ways that digital wallets containing private keys can be stored. The private key can be stored on paper wallets which are documents printed with the private key and QR codes on it so that it can be easily scanned when a transaction is needed.
Private keys can also be stored with hardware wallets using smart cards or USB devices to create and secure private keys offline. An offline software wallet can also be used to store private keys. This wallet has an offline partition for private keys and an online department with stored public keys. With the offline software wallet, a new transaction is transferred offline to be digitally signed and then transferred back online to be broadcast on the cryptocurrency network.
What is a public key?
Public key / Address is like two peas in a shell, Public key, or Address as the unique identifier for your account on Blockchain. As its name suggests it is completely public and can be viewed by anytime, by anyone. The public key is calculated from your private key.
The formula for calculating the public key is simplified as follows: Public_key = Private_key * G.
How does Public Key work?
When users start their first transaction with bitcoin or altcoin, a pair of public and private keys are generated. Each key is a long series of alphanumeric characters that help keep users safe in the digital ecosystem. The private key is known by the user alone and acts as the user's digital ID. The private key allows users to spend, withdraw, transfer, or perform any other transactions from their account. A sophisticated algorithm is applied to the private key to create a public key and both keys are stored in digital wallets.
When a transaction is initiated by the user to send, for example, bitcoin, to another person, the transaction must be broadcast to the network where the distributed nodes (i.e. the people behind the computer) confirm the validity of the transaction before completing and recording to the blockchain. Before the transaction is broadcast, it is digitally signed with a private key. The signature proves ownership of the private key, although it does not reveal the details of the private key to anyone. Because the public key is made up of a private key, the user's public key is used to prove that the digital signature comes from his private key. Once the transaction has been verified as valid, the money will be sent to the recipient's public address.
The public address is the hashed version of the public key. Because the public key is made up of an extremely long series of numbers, it is compressed and shortened to form a public address. In fact, the private key will create the public key, thereby creating a shared address. When two people enter into an agreement in which one person sends tokens or other coins, they reveal their public addresses to each other. Public addresses are like bank account numbers. The sender needs the number to be able to send money to the recipient, who will then be able to spend or withdraw money with his private key. The recipient can also verify the sender's coin batch using the sender's public address which will be displayed on the sender's screen.
Although public keys and addresses are treated with private keywords, the opposite is almost impossible. Cryptocurrencies are secured using complex mathematical functions to ensure that a private key cannot be processed from a public key, especially when people online see its public and hash keys. . Since it is impossible to recreate a private key from a public key or address, if a user loses his private key, any bitcoin or altcoins at his public address will not be accessible forever. On the other hand, a user who loses his public key can be recreated with his private key.
To better understand the Public key / Address and the Private key, follow the example below:
Let's look at how a Bitcoin transaction works.
If Tom transfers a bit of Bitcoin to Jenny. To perform a Bitcoin transfer, you need a Bitcoin address and a private key. The Bitcoin address is randomly generated, it is simply a sequence of letters and numbers. The private key is also a series of letters and numbers, but unlike Bitcoin addresses, it is kept secret.
Imagine your Bitcoin wallet is a safe deposit box with a glass in front. Everyone can know what it contains, but only the Private key can open it and take everything or put everything in.
When Tom wants to transfer Bitcoin to Jenny, he will use his Private key to sign for a message with the Input Source, Amount, and Output - Jenny's Bitcoin address.
He will then take them from his Bitcoin wallet to the vast Bitcoin network. From this network, the Bitcoin miner will confirm the transaction, place it in a transaction block and finally the transaction will be processed.
➤ A series of Dogecoin's leveraged products are listed on major exchanges
Simply put,
- The public key is your email address.
- The private key is equivalent to the password you use to log in to your email account.
If you want to start a transaction with BTC, you need:
- Sign up for an account on CoinBase to convert dollars, euros, pounds, etc. with major cryptocurrencies.
- A hardware wallet like the Ledger Nano S - this is the only thing on the list you'll have to pay, and it's absolutely the most important.
- A free Binance account - you can deposit the cryptocurrency you buy on Coinbase into Binance and exchange them into all the best altcoins.
- The free Google Authenticator App - two-factor authentication significantly reduces the likelihood of your account being hijacked.
Bitcoin in particular and virtual currency, in general, are becoming a hot trend and field recently, knowledge about them and blockchain can open up a lot of new opportunities.
Bitcoin Transaction
Bitcoin trading is the term that describes the amount of BTC sent from one or more Bitcoin wallets to one or more other Bitcoin wallets. Because of the transparency of blockchain, transactions can be monitored. We can check: Which wallet transfers to how much BTC at any time. But because of the anonymity, no one knows the owner behind those Bitcoin wallets. As well as immutability, Bitcoin Transactions (Bitcoin transactions) once confirmed cannot be changed (unless the recipient's wallet transfers BTC back to the sending wallet).
Bitcoin Address (Bitcoin wallet address)
Bitcoin Address is a string of letters and numbers, usually starting with the number 1. For example: 1J7mdg5rbQyUHENYdx39WVWK7fsLpEoXZy
Bitcoin Address means "receiver" in a Bitcoin transaction. You can imagine Bitcoin Address is like your friend's address when you order flower delivery service on birthday, or mailing address parcel ...
Normally, Bitcoin Address is Public Key after one encryption, but it is not necessarily so.
Private keys and public keys are the two factors that make the Bitcoin wallet unique.
- The public key is what needs to be made public to the community so they can confirm the transaction for us.
- The private key is more important and needs to be kept secret.
Bitcoin Address means "receiver" in a Bitcoin transaction. You can imagine Bitcoin Address is like your friend's address when you order flower delivery service on birthday, or mailing address parcel ...
How to check Bitcoin transactions?
To check Bitcoin transaction (check BTC transaction), visit https://www.blockchain.com/explorer, enter Bitcoin Address of the Bitcoin wallet to check, then press Enter.
- The information of that wallet will be displayed fully. Include: balance and list all transactions (send, receive).
- Unconfirmed transaction blockchain: means that the sender has transferred BTC to the recipient.
- Confirmed: transaction has not been confirmed.
Conclude
Hopefully, your article can provide the knowledge to help you better understand Private and Public keys. Transaction and Address in Bitcoin. How it works and the difference between a Private key and a Public key from a technical perspective.
Good luck!