What is a Private Key?
- Private keys act like digital signatures for proving ownership, creating wallets, and signing transactions with blockchain wallets.
- Do not lose or expose your private key. Store it safely.
The primary purpose of a private key is to prove ownership of your cryptocurrency and to authorize transactions. When you send cryptocurrency to someone else, you use your private key to sign the transaction.
Private keys are the core of security for cryptocurrency wallets. You can think of them as a password that unlocks your account on the blockchain, except that you can’t change or update them.
A private key is typically a 256-bit number represented in hexadecimal format such as this:
L5Ekzu4ffnMwguB2JErrt1a8Nonu8KohgRvtDiS3uHbDT41GhHRP
Private keys are cryptographically generated with complicated math and computer science algorithms. You can use the private keys of your wallets to access and manage your funds from anywhere in the world.
Private Keys and Public Keys
Public keys are generated from private keys with an asymmetric (one-way) algorithm that pairs the public key with an associated private key.
These are used to derive your public addresses on the blockchain, a place where you send money from, and people can send money to. You can generate a public key with your private key, but not vice versa.
Think of the relationship between private keys and public keys as similar to that of a public mailbox. Anyone can deposit messages into the mailbox, but only the owner of the mailbox can access the contents (decrypt with the private key).
Why are Private Keys Important?
You’ll use your public key to interact with decentralized applications and track your wallet’s interaction on blockchain explorers. A private key enables you to digitally sign data, such as a message indicating a payment from you to another address. Essentially, a transaction is a signed declaration on the blockchain that transfers ownership of a coin to a new address.
When you sign a message (i.e., a transaction) with your private key, others can use your corresponding public key to verify its authenticity. This process allows them to confirm that the message was indeed signed by you and ensures that it hasn't been tampered with.
Note it’s safe to provide your public key to someone but never ever share your private key.
What is a Seed Phrase?
Notice that the private Bitcoin key we provided above is very long and quite difficult to remember without copy-pasting. L5Ekzu4ffnMwguB2JErrt1a8Nonu8KohgRvtDiS3uHbDT41GhHRP for reference.
Thus it's more common with crypto wallets today for seed phrases to be used. A seed phrase, also known as a recovery phrase or mnemonic phrase, is a series of words generated by your cryptocurrency wallet that is used to derive and recover all the private keys associated with your wallet.
Seed phrases can generate multiple private keys. This is useful for wallets supporting multiple blockchain networks to issue one seed phrase. The algorithm that generates the private keys from the seed phrase is consistent, producing the same set of keys on compatible wallets.
Imagine your seed phrase as the master key for a safety vault with a derivation path that specifies the key to particular boxes (accounts) within the vault.
Seed phrases usually consist of 12, 18, or 24 words chosen from a standard list (according to standards like BIP39). This process is done through a deterministic algorithm, meaning the same seed phrase will always produce the same private keys. Here is an example of a 12 words seed phrase:
slender pupil pistol grain salmon smart whisper slim away acquire shock coin
Using the seed phrase, you can restore your wallet and all its associated private keys. This makes the seed phrase a critical backup tool.
How to Protect Your Private Keys
Scammers are always on the lookout for private keys and seed phrases. Thus, managing your private key may seem daunting, but it’s not complicated.
- Consider using hardware wallets to keep your private keys offline
- Backup your wallets to a storage location you consider safe
- Be cautious as you browse the internet (social media, emails, etc.) to ensure you do not click phishing links.
- Legitimate services will never ask you for your private key or seed phrase.
- Update your wallet software regularly.
Following these tips should help safeguard your wallet assets from bad actors. After creating a new wallet, backup your private keys or seed phrase to a secure location and restore them on secure devices when necessary.
Remember, you should NEVER share your private key and seed phrases with anyone. These grant irrevocable access to your account.
Do you have questions or require further information?
Click the red Live Chat button in the lower right of your screen or contact us via email at: support@backpack.exchange
Learn more about Backpack
Exchange | Wallet | Twitter | Discord
Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Backpack. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Backpack is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice.
.png)
.png)
