What is a Public Key?
Public key cryptography is an integral part of the cryptocurrency ecosystem. It provides a secure means of transmitting and storing funds, while also enabling users to control access to their wallets.
In cryptocurrency, public keys are used as addresses to which funds can be sent. A public key is a long string of numbers and letters that serves as a unique identifier for a user's wallet. It is generated through an algorithm and is derived from a user's private key. Unlike a private key, a public key can be shared with others without exposing the security of the wallet it represents.
When a user wants to send funds to another user, they use the recipient's public key to encrypt the transaction. The recipient's private key is then used to decrypt the transaction and access the funds. This ensures that only the person with the private key can access the funds, and that the transaction is secure from third-party intervention.
One of the key features of public key cryptography is that it enables digital signatures. A digital signature is a unique identifier that verifies the authenticity of a message and proves that it has not been tampered with. In the context of cryptocurrency, digital signatures are used to validate transactions and ensure that they are coming from the legitimate source.
Simplified Example
Think of a public key like a post office box. Just like you can use a post office box to receive letters and packages, you can use a public key to receive digital coins and tokens in cryptocurrency. Just like the post office box has a unique number, your public key is a unique string of numbers and letters that identifies your account and allows others to send money to you. But just like a post office box can only be opened with a key, your public key must be paired with a secret key to access your funds, which is like the key to your post office box.
Who Invented the Public Key?
The inception of the term "public key" can be traced back to the groundbreaking work of cryptographers Whitfield Diffie, Martin Hellman, and Ralph Merkle. While the term itself might not have been explicitly coined in a single instance, their collective research, notably presented in Diffie and Hellman's seminal paper "New Directions in Cryptography" in 1976, laid the foundation for asymmetric encryption. This innovative approach introduced a dual-key system, comprising a publicly accessible key for encryption and a private counterpart for decryption, revolutionizing secure communication and cryptographic protocols.
Today, "public key" is a cornerstone concept in modern cryptography, representing the freely shared component of asymmetric encryption systems. It plays a critical role in securing digital communications, validating identities, and enabling secure transactions across diverse technological landscapes, from encryption algorithms to blockchain networks, shaping the fabric of modern digital security.
Examples
Bitcoin: In the Bitcoin cryptocurrency, a public key is a unique alphanumeric string that is used to receive bitcoins. When a user wants to receive bitcoins, they generate a public key, which can be freely shared with others, and a corresponding private key, which must be kept secret. The public key is used to generate a Bitcoin address, which is the destination for incoming bitcoins. When a user receives bitcoins, they use their private key to access and spend the coins stored in their wallet.
Ethereum: In the Ethereum cryptocurrency, a public key is a unique alphanumeric string that is used to identify an Ethereum wallet. When a user wants to receive ether, the native cryptocurrency of the Ethereum network, they generate a public key, which can be freely shared with others, and a corresponding private key, which must be kept secret. The public key is used to generate an Ethereum address, which is the destination for incoming ether. When a user receives ether, they use their private key to access and spend the coins stored in their wallet.
Ripple: In the Ripple cryptocurrency, a public key is a unique alphanumeric string that is used to identify a Ripple wallet. When a user wants to receive XRP, the native cryptocurrency of the Ripple network, they generate a public key, which can be freely shared with others, and a corresponding private key, which must be kept secret. The public key is used to generate a Ripple address, which is the destination for incoming XRP. When a user receives XRP, they use their private key to access and spend the coins stored in their wallet. Public keys in Ripple are also used to identify validating nodes on the network, which are responsible for maintaining the integrity of the blockchain and processing transactions.
Related terms
Private Key/Secret Key: A private key is a unique, secret code that is used to secure and access a cryptocurrency wallet. In the context of cryptocurrency, a private key acts as a password that allows the owner of the wallet to control and access their funds.
Data Privacy: Data privacy is all about keeping personal information safe and secure. Personal information is information about a person that can be used to identify them, such as their name, address, phone number, or even their browsing history on the internet.