A public key is a long string of unique alphanumerical characters that enables a user to receive cryptocurrency funds into their account. Because the public key comprises of a long string of characters, it is compressed to form the public address. Thus, a public address is simply the hashed version of the public key. The public key is mathematically derived from the private key, using a complex algorithm. However, it is extremely difficult to reverse this mathematical process, and attempt to generate a private key by use of the public key.
The private key consists of 51 alphanumerical characters that allows a user to access their cryptocurrency funds. It is known only to the user, and essentially serves as user’s digital ID. The key is used to authorize any transactions made on a user’s account; before a transaction is recorded on the blockchain, it is digitally signed using the key. Because a public key is mathematically derived from a private key, the user’s public key is used to verify that the digital signature did in fact come from the private key. Details of the key are not disclosed to anyone throughout this process. As well as facilitating transfers, it also authorizes users to withdraw their cryptocurrency funds. Storing the key in a secure location is important, because if a user loses their key, they will not be able to access, transfer, or even withdraw their funds. Securing the key is also essential as it prevents unauthorized access to a user’s funds.