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Understanding crypto keys & addresses with crypto are buying through an exchange. Then it can be hard to understand concepts like private keys and public addresses because you’ll have limited exposure to them. But given that taking complete control of your crypto is good practice, it is essential to understand what private keys and also public addresses are and how they work.
Comparing a new subject or idea to something you are already familiar with makes it more relatable and provides a framework to understand its logic.
Understanding Crypto Keys & Addresses
Security & Location
An excellent way to start thinking about keys and addresses within crypto is by considering their function concerning where you live.
A physical key is a security feature that enables anyone possessing it to enter a property – like a house or an apartment – and also access anything within it.
For that reason, a key is protect, and you would think carefully about sharing it with anyone. Mainly if your home contains items of significant value.
Though you would carefully protect the key to your home, it is necessary to share its location – as described by the details that make up your address – for anyone to find it. Deliveries, guests, utilities, and communications
What are Crypto Keys?
- Just as a physical key secures the contents of a property or a vault. A legend in the context of crypto protects virtual funds. cryptocurrency – located at a virtual address within a blockchain.
- Like a physical key, a private key gives whoever holds it access to the funds it unlocks. So it is designed to be very hard to guess.
- A Bitcoin private key can be any 256-bit number (bits – the smallest unit of information in computing). But is most commonly represent by a string of 52 letters. And numbers starting with an L or K, in what is known as the wallet import format.
What are Crypto Addresses?
- On the Bitcoin blockchain, the location of the virtual funds secured by a Private Key is indicate by a Public Address. Which follows a similar format mixing letters and numbers. Still, depending on the design, it is shorter, featuring from 26-35 characters.
- Similar to your postal address, a Bitcoin public address – sometimes known as an invoice address – can share as it doesn’t give access to funds. However, the Bitcoin blockchain is open, and the address enables anyone with an internet connection to see its balance using a block explorer.
Where can I Find My Bitcoin keys?
If you are wondering where the Private and Extended Public keys we’ve describe can found. That will depend on the type of crypto wallet you are using.
Some wallets place the custody (control) of keys in the hands of whoever provides the service; the most obvious example is cryptocurrency exchanges – like Coinbase or Kraken. Your exchange wallet allows you to generate an address to receive or send funds. But you don’t have access to the Private Keys or the Extended Public Keys.
The extended public key can be accessed within the settings for each account within the wallet but is rarely needed. One example is for collating historical activity for collating crypto taxes. Your Seed will be generate when you set up the wallet, prompting you to make a copy. Given how important it is, the method of Seed storage is crucial.