In cryptography, a public key is a large numeric value that is used to encrypt publicly accessible data. This key is used not only to encrypt messages, but also to verify digital signatures. Together with the corresponding private key, this so-called asymmetric cryptography is the backbone of blockchain's secure transaction system.
A public key is the opposite of a private key. It can be shared publicly without breaking the security of the corresponding wallet. The public key acts like the address of a mailbox that can only be opened with the private key. Transactions are often sent to the public key.
The public key in the cryptocurrency world
Asymmetric cryptography uses a two-key system to secure communications and digital transactions. This cryptographic system works on the principles of a public key, which can be shared openly, and a private key, which is known only to the owner of the key. While public keys lock data, private keys are used to unlock or decrypt it. Public keys are part of digital certificates that prove the identity of the owner. These keys are generated using asymmetric algorithms such as RSA, Elliptic Curve Cryptography or the Digital Signature Algorithm.
When an individual initiates a transaction, they use their private key to cryptographically sign it. The corresponding public key is then used to verify the signature and authenticate the transaction. This process ensures that the transaction is legitimate and authorised by the rightful owner of the cryptocurrency. Public keys are also used to generate wallet addresses. Wallets, which are digital tools for storing and managing cryptocurrencies, often display a public key or its hashed version as the receiving address. Users can share this address to securely receive funds.
