We use our email address and password to log into our online accounts and access them. The email address is used to identify users. Passwords store users’ sensitive information. Similarly, when dealing with sensitive financial information, secure storage becomes even more vital. Public and private keys are crucial for storing data securely. You can say a public key is like an email address and a private key is like a password.
How does a Private Key work?
Private keys are vital to secure your accounts. We must look at its process from creation to management and storage to understand how private keys work. The popular method to explain this process is asymmetric encryption, used in crypto tokens.
Creating a private key
Public and Private keys are matched pairs under asymmetric encryption. These keys are algorithmically linked with each other. First, a private key is generated randomly. This key is usually a long string of alphabets and numbers.
Next, complex math is performed on the private key to generate a public key. It is impossible to reverse this process with the technology available today. A private key can not be acquired from a public key.
Storing private keys
Once you create a private key, it is vital to keep it secure. Public Keys can be shared with anyone on the network. You should avoid giving your private key to anyone. Your private key is like your password, and your account could get compromised if it falls into the wrong hands. Criminals or hackers can take control of your account and make transactions if they have access to your private key.
Using a private key
Any user who wants to transact or share information with you must first encrypt the data using your public key. Encryption because a public key is the only available identifying information on the network. You can use your private key to decrypt the data when the user sends the encrypted data.
What is private key encryption?
A method of encryption that uses a single key to encrypt and decrypt information is known as private key encryption. This method of encryption is also known as symmetric cryptography. This type of encryption is a fast way to share data securely because it uses a single key. This method is also easier to implement than public-private key pairs.
However, this method has some disadvantages. It might be harder to manage your accounts using a single key because keys can get stolen. This issue can be solved using public key encryption. This type of encryption is more secure but slower than symmetric encryption. This method of encryption is also known as asymmetric encryption.
Advantages and disadvantages of private key encryption
Advantages
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.
Fast Usage: Private key encryption is faster than public key encryption because of its simplicity.
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.
Disadvantages
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.
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.
Example of private key encryption
Private key encryption is usually used to access large stores of data. Private keys are used to secure disk drives, servers, and other similar storage devices. Using private keys to secure data is a more efficient cryptographic method. Systems are more sluggish and cumbersome to use when trying to use a public key to encrypt a large store of data.
Public key encryption is the method of choice when a small amount of data is to be protected, security is paramount. This is the reason why public-private key pairs are used on crypto accounts.
What is the best method to store private keys?
There are many methods to store users’ private keys.
Software wallet
Software wallets are also known as mobile wallets. These wallets are applications that run on your browser or smartphone to store keys securely. These wallets are easy to access at any time as they are always connected to the internet. However, they are exposed to hacking as they can be accessed online.
Currently, the Coinbase wallet and Metamask are the most popular software wallets.
Hardware wallet
Hardware wallets are in the form of USB pen drive devices. These wallets are known as cold wallets as they are generally used for cold storage. Users can store private keys for a long time in hardware wallets. These keys are not connected to the internet and are stored offline.
Trezor and Ledger are examples of the most popular hardware wallets.
Paper wallet
Private keys can also be stored on paper to stay completely secure. Users can print their private and public keys on paper as a QR code or barcode. Users can store them in password-protected safes.
Final Thoughts
Private keys are one of the most important innovations in the blockchain space. These keys are a secure and fast way to protect your data and are used in various applications. There are many methods to store your keys, such as hardware, software, and paper. The best option for storing private keys depends on how often you access them and the precautions you take to ensure the safety of our online data.
