What is a private key for a crypto wallet? How to create it and where to store?

Getting started with Bitcoin and other cryptocurrencies may seem to be quite a difficult process for newbies, but learning the basics and main rules is a must if you really decide to get serious about cryptoactive assets.

Security is something that needs special attention. And here one of the most important points is the concept of public and private keys. In this article we will look at the latter.

What is a private key?

A private key (also called a private key) is a special combination of characters that provides access to cryptocurrencies stored on the account. Only a person who knows the key can move and spend coins.

In the simplest case (more on this below), the system itself generates a private key, after which a public (public) key is created on its basis. The public and private key are alphanumeric combinations that are associated with each other. At the same time, this is a unidirectional connection — knowing the private key, you can find out the public one, but knowing the public key, you cannot find the private key.

A private key is a complex cryptogram created by using an encryption algorithm ; it also serves as a kind of signature when sending transactions.

The video below clearly shows how private and public keys work:

What does a private key look like?

Let's look at an example of Bitcoin , what a private key looks like. Bitcoin is based on the SHA-256 encryption algorithm, which creates a 256-bit number consisting of zero and one.

However, it is very inconvenient to use such a long set and, moreover, the key must be encrypted. Therefore, a private key from a bitcoin account is created as a 32-byte number, which consists of 64 characters. For each character there are two values (zero or one) from the above 256-bit number. It uses numbers from 1 to 9 and alphabetic characters from A to F.

Private key example :

B4653223363AA61F20BD08FC233AC3726 2

Guessing or finding the private key using the “brute force” method is almost impossible. In essence, it is a number in the range from 1 to 10 to the 77th power. If we imagine that a person has the opportunity to sort through one trillion numbers per second, then it would take at least one million ages of existence of the planet Earth to search for one private key.

But some researchers believe that with the development and improvement of quantum technologies, methods of hacking the blockchain will appear.

It is also worth saying that with the development of the cryptosphere, different formats appeared for storing private keys. These are alternative formats called the Wallet Import Format. There are three of them:

1. Hex: 1E99674A4CA27608A45A1813ABB0E9E52CFA330AC563EDBB32C8AAC6A964AECA.
2. WIF: 5J3nBbAG58CuQ346RNLpPUA
3. WIF-compressed: KxFC1jnghCoACiATWZ3oXa748VN6ac3TYzGkd7YbsqGLY

The same key is stored in these formats. Each format can be easily converted to any other.

What is a private key for?

The private key performs two basic functions. The first is the secure storage of cryptocurrency, since only the one who knows the private key can conduct operations with these assets. That is why you need to be extremely careful when creating a key, and in no case do not show it to third parties, and also not store it on the Internet, and ideally even on computers that are connected to the Internet.

The second function is the transaction signature. The private key is also a digital signature. As mentioned above, a unique public key or address is associated with each private key.

When sending a BTC transaction to the network, the nodes verify the correspondence of the sender's address with his public key, while the information about the private key remains secret for everyone, even for validators. As soon as the required number of confirmations is received, the transaction will be delivered to the recipient.

How to create a secure private key?

And now let's talk about one of the most important points – how to create such a key so that it provides secure storage of cryptocurrency assets. You can generate a private key using several services.

Paper wallets

The advantage of this method is that the keys are stored offline. One of the proven service, with the help of which even a novice can create a private key, is bitaddress.org . Three simple steps are required:

Step 1. Follow the link above. A window with a set of random alphanumeric and numeric characters will appear on the screen. Move the mouse around the screen until the percentage of randomness reaches 100%:

Step 2. When the indicator reaches 100%, a QR code and private key hash will appear on the screen:

Step 3. Print the newly created keys, or you can also rewrite the key on paper.

Dekstupnye wallets

The process of key generation in dekstopnyh wallets is very simple. Most popular – Exodus wallet, Electrum, Jaxx. The key will be created in fully automatic mode.

Consider this process using the Exodus wallet as an example :

• Go to the developer menu and choose to create a wallet for bitcoin .
• Select the "Export" section. The system will show a warning that when copying and exporting a private key there is a risk of losing it and being used by third parties. Agree to export.
• The private key will be saved in a folder on your desktop.

For reliability, copy the file with the key to a medium that does not have Internet access, for example, to a USB flash drive. You can also rewrite the key on a sheet of paper.

Online wallets

Cryptocurrency online wallets also allow you to create a private key. In some, it is generated automatically, and in some it can be created independently.

It is very important to familiarize yourself with the conditions of a particular wallet. It is recommended to select those that store the keys not on the server, but on the user side.

For example, such a service is Bitcoin Wallet Blockchain .

Previously, this service could get the keys automatically, but more recently, this option was removed. This can now be done by creating a mnemonic phrase. A mnemonic phrase is a special list of words that are later converted into a private key hash. In the Blockchain wallet, the mnemonic phrase consists of 12 words.

To get a private key, do the following :

• Go to the section "Storage – Settings – Security – Creating a backup phrase."
• The system suggests to choose in several stages 12 words from a random set. Need to select and remember. For reliability, you can write these words on a sheet of paper, which is recommended to be stored in a safe place that is not accessible to third parties.
• A purse to suggest to check how well you remember the selected words – you need to enter any four of the twelve.
• Next, go to iancoleman.io/bip39/ . Please note that the link looks exactly like this, otherwise there is a risk of becoming a victim of a phishing attack.
• The next step is very important: disconnect from the network to ensure maximum security.
• Turning to the site, you need to select the language of the mnemonic phrase, the number of words, enter the words themselves. Check again whether you entered the words correctly – due to an error in one letter, you can lose all your cryptoactives!

The system will generate a private key, which you will find at the bottom of the window in the “Derivation Path” section.

Brain Wallet ("brain wallet")

This method is considered more reliable, since the user himself is the creator of his key. However, it will suit more advanced users.

This method is called Brain Wallet, i.e. "Brain wallet", since the key is generated by the brain efforts of the owner of the future key, and is that the user must come up with any phrase or number and encrypt it through the SHA-256 algorithm.

Creating a key in this way, you need to remember only one rule: the more difficult the phrase / number is, the more reliable the private key will be.

Of course, you can use the number 1 as a key. And you will laugh, but there are users who did just that.

The hash of the number 1 in the SHA-256 system is the following value:

• 1EHNa6Q4Jz2uvNExL497mE43ikXhwF6kZm

If you click on the link, you will see that over the past few years, this key has been used in more than 1200 transactions and operations on almost 5 BTC were performed on it:

A similar situation can be observed when using the well-known phrase “To be or not to be” as a private key:

• 1J3m4nneGFppRjx6qv92qyz7EsMVdLfr8R

See for yourself:

These examples show that the choice of a secure private key is a step that needs to be taken as seriously as possible.

Some services provide the option of creating a "brain wallet", for example, the same bitaddress.org.

To use this function, you need to go through the tab "Smart Wallet":

Next you need to enter a phrase (note that it should be impossible or at least difficult to guess), confirm again and click on the “View” button. The site will generate a private key that can be printed or copied to paper:

The advantage of this method is that even if you lose a private address, you can restore it if you convert it using the standard SHA-256 algorithm — such converters are easy to find on the Internet, for example, this one .

The private key can not be written at all if you are sure that you have memorized the phrase, and the address must be written down so that Bitcoins can be transferred to it.

But if you are still very afraid that someone will be able to recognize your even super-complex key, then there is another way to create a private key that will provide 1000% security. Take a coin, toss it 160 times in a row and write down “0” if tails fell, and “1” if an eagle fell. After that, the resulting number can be converted in the SHA-256 algorithm, and you will get a very reliable private key, since it is unlikely that anyone will be able to flip a coin just like you.

How to store private keys?

It is important not only to create a reliable key, but also to store it correctly. In general, there are three options for storing keys:

• on paper (metal)
• on electronic media
• in mind.

In this case, no matter what method you choose, it is important to remember that only you should have access to the private key.

And now we will tell you what are the storage options :

• On paper or metal . This method is most relevant for paper wallets, but you can store a private key created by any method this way – you just need to rewrite it. However, such storage is not safe: you can lose a sheet, it can burn or soak. For greater strength, it can be laminated or make a copy of the metal.
• On a flash drive . This is one of the most reliable ways. You need to use a separate USB flash drive (preferably new and tested for viruses) and perform all operations in offline mode. There are several storage options: in the form of a text document, a screenshot or the original file in wallet.dat format. Also, be sure to put a password on the flash drive.
• On the computer . It is also a fairly reliable storage option, if the device is not connected to the Internet and is working properly. Otherwise, he or may become a victim of intruders, or "fly." It is also recommended to put a strong password on the file with the key and on the computer.
• In memory . This is probably the safest way to store a private key. However, it will only work if you used the mnemonic phrase as a private key. Because remembering a set of random numbers and letters is simply unrealistic.

Transferring private keys (sweeping)

In some cases, it may be necessary to import a private key, for example, from a paper carrier into a wallet. In this case, it is important to understand that you are creating a second copy, which is highly discouraged. This is especially important to exclude if the key was received from another person – after all, it is not excluded that he can use access to funds with bad intentions.

In this situation, it is best to resort to sweeping . Its principle is very simple. You need to create a new private key in the wallet that you plan to use. After that, transfer funds from the old address to the new one. Thus, in the end, you will get a new private key, known only to you, in a single variant, and the funds will be safe.

It is worth using sweeping in such cases:

• If the copy of the private key can be kept by someone else;
• If you lost the key, but remember the mnemonic phrase;
• If you decide to use the tools, and your keys are stored on paper.

Private (private) key as opposed to public – this is secret information that no one should know, except for its owner. The one who owns the private key – owns the funds stored on it.

Therefore, it is very important to ensure reliable storage and not to forget about the sweeping method, especially if you lose access to the key vault or if it falls into the hands of other people. If you follow these simple rules, your cryptocurrency assets will always be safe.