Public Key Meaning

Aug 1, 2023 | Updated Aug 1, 2023

A public key is a code of alphanumeric characters that users use to receive cryptocurrency in their wallets.

What is a Public Key?

In cryptocurrency, a public key is a cryptographic code that facilitates peer-to-peer transactions. It enables users to receive cryptocurrencies in their wallets.

A unique pair of keys – public-private key pairs – is generated during crypto transactions. The sender uses the public key to encrypt the transaction or message and the recipient decrypts it using the private key. Public keys can be shared with the public without compromising the composition or security of private keys.

Think of public keys like a bank account number that a person uses to receive funds in a transaction, such as their job’s direct deposit. Public keys are like your account number – they allow someone to send you money, but not access your account. A private key is like the secure login information that allows you to access the funds that have been placed in that account.

The public key is a large set of numbers and letters. Once a transaction is validated, digital assets are sent to the recipient’s public address. The public address is fashioned from hashing and compressing the public key. In essence, private keys generate public keys, which in-turn generates the public address.

Here’s an example of a public key:

3078 0241 00C9 18FA CF8D EB2D EFD5 FD37 89B9 E069 EA97 FC20 5E35 F577 EE31 C4FB C6E4 4811 7D86 BC8F BAFA 362F 922B F01B 2F40 C744 2654 C0DD 2881 D673 CA2B 4003 C266 E2CD BC02 0301 0011

Do Public and Private Keys Work Together?

Public and private keys are generated together using asymmetric cryptography. The public key is derived from the private key using a one-way function that is nearly impossible to reverse. This means that private keys cannot be derived from the corresponding public keys, which are publicly accessible.

The private key is akin to a digital signature or security feature that prevents third parties from accessing a user’s assets. In cryptocurrency, public keys allows you to send crypto assets to other users. Private keys, on the other hand, allow you to access and manage the digital assets in your wallet by proving that you are the rightful owner of the corresponding cryptocurrency.