When you create a crypto wallet, you will be issued a public and a private key. A public key functions as an email address and can be shared with others to facilitate transactions. A private key, as its name suggests, should never be shared.
Your private key is similar to a password that unlocks your crypto wallet. This is why it is critical to ensure that only you can access your private key to keep your funds and digital assets secure and protected.
Why Private Keys are Important for Security
The use of public and private keys has made it possible to manage digital funds and make transactions securely online. Cryptocurrencies like Bitcoin are decentralised, which means that your crypto is distributed across a computer network through the use of blockchain technology. Blockchains are open to everyone, allowing all users to view your public key and transaction records.
Your private key generates your public key, creating a unique matched combination of keys. Whenever you transact using your public key, you will also need to verify your identity using your matching private key.
While cryptocurrency transactions are anonymous, having a private key ensures that only you can make transactions linked to your wallets.
How to Safely Manage Private Keys
Your private key should be treated like any other password and be kept safe and secure at all times to avoid security risks that could lead to a loss of funds.
It’s recommended that you store your private keys online in a crypto wallet like Best Wallet. These wallets, called ‘hot’ wallets, store sensitive private keys, making it easy and convenient to complete digital transactions online. When choosing a wallet in which to store your private keys, be sure to choose one with a proven history of offering a high standard of security.
You can also store private keys offline on non-internet-connected devices or in physical notebooks. Although these strategies can effectively protect your private keys from being compromised, they can make it more challenging and time-consuming to make transactions.
They also carry their own risks. For instance, if you write your private keys down in a notebook, anyone using or reading it can access your keys and, thus, your wallet.
Make Key Safety A Priority
Private keys are an essential aspect of managing digital crypto accounts, helping to verify your identity and help you to transact securely.
Safely storing your private keys—whether in a hot wallet or offline—is essential for protecting your funds and reducing the risk of cybercriminal activity.