What are Blockchain Private Keys?
Private keys are nothing but an encrypted string which can be obtained by anyone to create encrypted messages which can be deciphered only by the second key known to the recipient. Private keys are an essential part of blockchain technology. Cryptocurrencies such as bitcoin also known as Digital currency is a secure messaging system which is known as Bitcoin Network which processes value-transfer messages called transactions. Here private keys are used to authenticate your messages by identifying each user.
In Blockchain we use two pairs of Keys: Public Keys and Private keys, where Public Keys are known to everyone and used for identification purpose and the second is the private key which is kept secret and encrypted. Private keys are represented in Wallet Import Format (WIF) which consists of letters and numbers, For example
Example – U9VQQSQzY1oZMVX8i1m5WUTLPz2yLJIBQVdXqhMCQBGoiuSoSjafUhV7i1cEGpb88h5NBYZzWXGZ
Cryptocurrencies use these keys for 3 functions: As the address, associated with a balance and sending and receiving funds. For generating a bitcoin address we use private keys. Furthermore, Public keys are also known as a known algorithm where the address is used in transactions.
Private Keys are very essential for operating blockchain technology as it grants and verifies ownership of funds to a given address. Blockchain wallet automatically generates and stores private keys for you. Any person in possession of a private key can sign a transaction. You should be aware that anyone knowing your private key can steal your bitcoins. Because the Private keys act as a pass to spend bitcoins it should be kept very carefully in computer files or hard copy.
The Process of Using Private keys in Blockchain Technology
This system of solving problems by Bitcoin network through a system known as Public Key Cryptography. It has the ability to create a Digital Signature. The system uses two pieces of information for authenticating messages. The Public key is used to identify sender and receiver while private key creates a message signature. Public keys can be distributed to others while private keys must be kept secret. In addition, These two keys are linked to signature algorithm a shown below.