What are private keys, addresses, and wallets?
Ownership of bitcoins is established through digital keys, bitcoin addresses, and digital signatures. The digital key is not actually stored in the network, but is generated by the user and stored in a file or a simple database called a wallet. The digital keys stored in the user’s wallet are completely independent of the Bitcoin protocol and can be generated and managed by the user’s wallet software without the need for a blockchain or network connection. Keys enable many interesting features of Bitcoin, including decentralized trust and mechanisms, ownership authentication, and a cryptography-based security model.
Every Bitcoin transaction requires a valid signature to be stored on the blockchain. Only a valid digital key can generate a valid digital signature, so having a copy of the Bitcoin key is equivalent to having control over the account’s Bitcoin. A Bitcoin wallet contains a series of key pairs, each of which contains a private key and a public key. A public key is like a bank account number. And the private key is like the PIN that controls the account or the signature of the check. Bitcoin users rarely see digital keys directly. Typically, they are stored in wallet files and managed by Bitcoin wallet software.
What is a BTC private key?
The private key is a number, usually chosen at random. Control of all funds in a Bitcoin address depends on the ownership and control of the corresponding private key. In a Bitcoin transaction, the private key is used to generate the signature necessary to pay Bitcoin to prove ownership of the funds. The private key must be kept secret at all times, because if it is leaked to a third party, the bitcoin equivalent to the protection of the private key is also surrendered. The private key must also be backed up in case of accidental loss, because once the private key is lost, it is difficult to recover and the bitcoin it protects will be gone forever.
What is a BTC address?
With the private key, we can use the one-way encryption function of elliptic curve multiplication to generate a public key, which is an irreversible process. Armed with the public key, we can generate Bitcoin addresses using a one-way cryptographic hash function.
In general, Bitcoin addresses are generated from and correspond to a public key. The Bitcoin address is like the name of the payment object on the check (i.e. the “payee”), in this way, the Bitcoin address abstracts the payee and makes the destination of the transaction more flexible, just like a check. The bitcoin address is the only representation of the key that users often see, they just need to tell others about the bitcoin address.
What is a wallet?
A wallet is a container for private keys, usually implemented as an ordered file or a simple database. Bitcoin wallets only contain private keys and not bitcoins. Each user has a wallet that contains multiple private keys. The wallet contains pairs of private and public keys. Users sign transactions with these private keys, thereby proving that they own the output of the transaction (that is, the bitcoins in it). Bitcoins are stored on the blockchain as transaction outputs.