• Daniel Marsh |
  • October 29, 2021 |

    what is a Private and Public Key?

    Bitcoin uses public-key cryptography to create a key pair, a corresponding public and private key that controls ownership of bitcoin. The public key is used to receive bitcoin, while the private key allows a user to sign transactions by creating a digital signature and thus spend the bitcoin. When a user presents a public key and signature, anyone on the Bitcoin network can verify and accept a transaction as valid, confirming that the user spending the bitcoin is the true owner of the funds.

    How Is a Private Key Generated?

    Private keys are usually generated by a user’s Bitcoin wallet. However, the user rarely has to see or directly interact with their private keys as their wallet handles all of the complex math behind the scenes.

    Bitcoin wallets use an industry-standard to derive private keys. First, the wallet uses a secure random number generator to generate a seed, which can then be used to derive as many keys as are needed by the user. This setup allows the wallet to backup only one seed and not each unique private key.