The Dimecoin Database
What are receiving addresses, public keys, and private keys?
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Receiving Addresses vs Private Keys vs Public Keys
There is more to your wallet than just a receiving address. Every address in a wallet also contains a public and private key. Private keys are randomly generated strings (numbers and letters), which allow your coins to be spent. Private keys are mathematically related to each receiving address; every receiving address generates a unique private key. Due to a strong level of encryption resulting from the cryptographic algorithm, it is almost impossible to reverse engineer.
Public addresses, also known as receiving addresses, are the ones used to receive coins.
Private keys, also known as secret keys, are a variable of cryptography that permits individuals to access their cryptocurrency. Private keys are only intended to be shared with the user who generated the key, providing a high-security level. A private key is fundamentally the most important aspect of blockchain. Its cryptographic security helps protect users from loss and unauthorized access to their coins.
Digital wallets are used to store the private keys associated with each address a user generates. When a transaction is initiated, the software creates a digital signature by processing it with the private key. The only way to generate a valid signature is through the use of the private key. This digital signature is used to determine the transaction is coming from a specific user. Additionally, the signature guarantees that the transaction cannot be changed once it is broadcast to the network, becoming immutable. The digital signature will change if the transaction is altered in any way.
If a user loses their private key, they can no longer access the wallet to spend, withdraw, or transfer coins. Therefore, it is essential to keep the private key in a secure location. There is no way to recover a lost private key.
Commonly, public keys are mistaken for the receiving address. However, that is untrue, but they are mathematically related. Simply put, a wallet address is a hashed version of your public key.