VISUAL NOTES | TECHNOLOGY | BITCOIN
Keep it secret. Keep it safe!
This is the single most important advice for keeping your cryptocurrencies safe!
Public key cryptography is possibly one of the important corner stone for safe and secure transmission of data over internet. The browser or app you are using to see this page is actually using this technology to initiate a secure communication channel with the server.
(Just FYI: The client and the server then go through a SSL/TLS handshake process consisting of a series of back-and-forth communications to establish a secure connection. Out of scope for this post, but you can find a plethora of content on this technology.)
It has been evolving since the 1970s and various algorithms have been developed since then! (One such algorithm is RSA — Rivest–Shamir–Adleman) They have become tried and tested industry standards.
The mature Public Key Cryptography is mathematical foundation for computer and information security! Bitcoin is one of many technologies that leverages it!
Now a quick view of the role of Public Key Cryptography Bitcoin world!
A bitcoin wallet basically contains a collection of key pairs, each consisting of a private key and a public key. (Yes it does not have any coins in it. It is all there on the blockchain in the form of transactions!)
Unlike the traditional encryption and decryption, these asymmetric keys are used to generate signatures and verify them (will cover it in upcoming notes).
Or put in simpler terms, they allow you to receive (public key) and spend (private key) your bitcoins.
[Just FYI] A private key can be applied to the digital fingerprint of a transaction to produce a numerical signature. This signature can only be produced by someone with knowledge of the private key. However, anyone with access to the public key and the transaction fingerprint can use them to verify the signature. This useful property of asymmetric cryptography makes it possible for anyone to verify every signature on every transaction, while ensuring that only the owners of private keys can produce valid signatures. — Mastering Blockchain, O’Rielly
Now how are those keys created!
As a user this process is invisible to you. The crypto wallet you use typically generates it behind the scenes.
The key takeaway is that the process of generating keys are deeply rooted on strong mathematical foundation!
The private key basically is a random number (256 bits long — Bitcoin). The algorithm to generate this varies depending on the cryptocurrency wallet application you use.
From the private key, using a cryptographic function (elliptic curve multiplication) a public key is generated.
Note that this is a one way function. Meaning, if you have the public key it is nearly impossible to re-create the private key.
Finally, the wallet address. This is something that you share for receiving cryptocurrencies! This is generated using standard hashing (hash 160) and base encoding (Base 58) techniques. And this too is a one way function.
Basically it represents address to your wallet where the private keys are. Or in simpler terms, it is similar to your bank account number which you share to receive money. Except that in your cryptocurrency wallet there is no coin in it. Yes, it is counter intuitive :)
If you are interested and want to know more, scroll down to access links and videos that i referred to better understand the concepts from a technical and functional perspective.
That said, I just want to close this post with this gif. Keep your private keys safe and secure.
References:
If you liked this piece, do consider sharing, subscribing, or following!
While you are at it, don’t fee shy to leave a few claps behind. It really helps keep the neurons in our brains excited and work on the next piece :)
