📝 Hi, I’m 𝟏𝟎, this is the popular science series of #BlockchainDevelopmentHistory, this issue’s content: Bitcoin’s private key, address and wallet.
The ownership of Bitcoin is established through digital keys, Bitcoin addresses and digital signatures. Users hold the key, just like the "key" to their account, and can manage it without the Internet. Bitcoin thus achieves decentralized trust and security.
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1. What is a BTC private key?
The private key is the "key" that controls Bitcoin. It is usually a randomly generated number that determines the control of all funds in a specific Bitcoin address. In each transaction, the private key generates a signature to prove the holder's ownership of the funds. However, this "key" must be kept strictly confidential, because once it is leaked, the Bitcoin will be directly sent away. At the same time, the private key must also be properly backed up - once lost, all Bitcoins bound to it will disappear completely and cannot be recovered.
2. Where should private keys be stored?
It is very important to protect the security of your private key, just like protecting your password. There are two common storage methods:
Online storage (hot wallet): Most people choose to manage their private keys in a virtual wallet (such as Coinbase, etc.) because of its convenience and ease of operation. Hot wallets store private keys on the Internet, making buying, selling or using cryptocurrencies as easy as swiping a credit card online. It is recommended to choose a platform with two-factor authentication and a good security record.
Offline storage (cold storage): Some investors store private keys on unconnected devices, paper, or even in their heads, which is called "cold storage." Although cold storage can effectively prevent digital theft, it is not convenient enough when using cryptocurrencies and there is also the risk of accidental loss.
3. What is a BTC address?
Once we have the private key, we can use the elliptic curve cryptography algorithm to generate the public key, which is an irreversible process. Next, we convert the public key into a Bitcoin address through a one-way hash function. The Bitcoin address is like the name of the payee on a check, abstracting the transaction object and increasing flexibility. Users only need to share this address, just like filling out a check, to facilitate others to send Bitcoin to it. It is not only a unique public identifier for the user, but also simplifies the entire transaction process, making the exchange of digital currency easy and intuitive.
4. What is a wallet?
A Bitcoin wallet is like a digital safe that is specifically designed to hold your private key, which is your "key" to access and manage your Bitcoins. In fact, the wallet does not store the Bitcoins themselves - these Bitcoins exist on the blockchain in the form of transaction outputs.
Each user's wallet can contain multiple private keys and their corresponding public keys. A private key is like a signature on a check, proving your ownership of a bitcoin transaction output. A public key is like your bank account number, and others can use it to send you bitcoins. In short, although bitcoins exist in the blockchain, you must use private keys to manage and use them. Therefore, it is crucial to keep your private keys safe!
5. Tail
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