Every time you log into your online accounts to access emails or social media, you use your email address and password. In this case, the address is used to identify you, while the password is to store your sensitive information. Secure storage becomes even more essential when dealing with financial information like crypto tokens. This is where public and private keys come in. The public key is like your email address and the private key is your password.
How Does A Private Key Work?
Private keys are an essential part of securing your accounts. To understand how it works, we must look at its cycle from creation to storage and management. For this, we use the example of asymmetric encryption as that is the most popular method used in crypto tokens.
Creating a Private Key
Under asymmetric encryption, your public key and private key are a “matched pair”. They are thus algorithmically linked together. First, your private key is generated randomly. This is usually a long string of alphabets and numbers.
Second, your public key is generated by performing complex math on your private key. It is virtually impossible to reverse this process with today’s technology, so you can trust that your private key cannot be derived from the public key.
Storing Private Keys
Once created, it is vital to keep your private key secure. Your public key can be shared with anyone on the network. However, since your private key is like your password, giving it to anyone else means your accounts are compromised. Anyone with access to your private key can take control of your account and make transactions on your behalf.
Using a Private Key
Anyone who wishes to transact or share information with you must encrypt it using your public key. This is because your public key is the only identifying information available on the network. Once you receive the encrypted information, you can use your private key to decrypt it.
What Is Private Key Encryption?
Private key encryption – also known as symmetric cryptography – is an encryption method that uses a single key to encrypt and decrypt information. Since it uses a single key, it is a fast method to share information securely. It is also simpler to implement than public-private key pairs.
However, this comes with its own disadvantages. Having a single key makes it harder to manage your account as keys may be stolen. Public key encryption solves this problem. Also known as asymmetric encryption, this process is more secure but slower than symmetric encryption.
Advantages and Disadvantages of Private Key Encryption
|Security Against Attacks: Long, randomly generated private keys are practically immune to brute force and dictionary attacks. Even the most powerful computer available today may take hundreds of thousands of years.
|Key Management: It is essential to keep private keys secure. If anyone else obtains your private key, they can gain access to your account and perform any action they wish.
|Fast Usage: Private key encryption is faster than public key encryption because of its simplicity.
|No Recovery: If you lose your private key, any information encrypted using that key is lost forever. There is no method to recover encrypted data without the private key.
|Wider Implementation: While crypto tokens may use public key encryption, most other forms of cryptography use simple private key encryption. This is because it is easy to implement and makes processes faster.
What Is An Example of Private Key Encryption?
Today, private key encryption is mostly used to access large stores of data. Servers, disk drives and other such storage devices are secured using private keys as it is a more efficient cryptographic method. Trying to use public key encryption for a large store of data would make the system sluggish and cumbersome to use.
When security is paramount and the amount of data to be protected is lesser, public key encryption is the method of choice. This is why your crypto accounts use a public-private key pair.
What Is the Best Way to Store Private Keys?
When deciding on ways to store your private keys, there are many options.
These wallets are also sometimes known as mobile wallets. These are applications that function on your smartphones or web browser and store your keys securely. They are the easiest to access as they are always connected to the internet and can be used at any time. However, they are prone to hacking as they can be accessed by hackers online.
The most popular software wallets are Metamask and the Coinbase wallet.
Hardware wallets are devices similar to USB pen drives. They are also known as cold wallets as they are usually used for “cold storage”. In other words, hardware wallets are ideal for storing private keys for a long time. These keys are stored offline and are not connected to the internet.
The most popular hardware wallets are from Ledger and Trezor.
To stay completely secure, your private keys can also be stored on paper. You can print out your public and private keys on paper as a barcode or QR code and store them in passcode-protected safes.
Read more: Crypto wallets- Everything you need to know
Private keys are among the most essential innovations in the cryptography space. Today, we see them used for a variety of applications as a fast and secure way to protect information. There are many ways to store your keys, such as paper, hardware and software solutions. The best method for storing them depends on how often you need to access them and the precautions you take to ensure your safety online.