Crypto Glossary: Public Key
Definition: A public key is a fundamental component of public-key cryptography, a cryptographic system that operates with pairs of keys. It is used for encryption, digital signatures, and secure peer-to-peer cryptocurrency transactions. The public key is designed to be shared openly and is used to encrypt messages or verify digital signatures.
Key Points and Concepts:
- Pairing with Private Key: In public-key cryptography, each public key is paired with a corresponding private key. While the public key can be freely shared, the private key must be kept secret.
- Encryption: Public keys are used to encrypt sensitive information or transactions. Messages encrypted with a recipient’s public key can only be decrypted by the corresponding private key, ensuring confidentiality.
- Digital Signatures: When used for digital signatures, the private key is used to sign data, while the public key is used to verify the signature. This verifies the authenticity and integrity of digital documents or transactions.
- Secure Transactions: In cryptocurrency, public keys are used to generate public addresses. Users share their public addresses to receive cryptocurrency payments. Funds sent to a public address can only be accessed and managed by the owner of the corresponding private key.
- Analogous to Bank Account: Public keys can be likened to a bank account number. They enable others to send funds or messages securely to the key’s owner, similar to how individuals receive direct deposits in a bank account. However, possessing the public key alone does not grant access to the associated assets.
- Derivation and Format: Public keys are typically represented as a long alphanumeric string, often in hexadecimal format. These keys are generated from private keys through mathematical algorithms.
Public and Private Keys in Cryptocurrency:
- Working Together: Public and private keys work in tandem in cryptocurrency transactions. The public key is used to receive funds by sharing the public address, while the private key is used to access and manage those funds securely.
- Asymmetric Cryptography: Public and private keys are generated together using asymmetric cryptography. The private key remains confidential and is used to prove ownership and authorize transactions, while the public key is shared openly for transactions and verification.