Public Key
A cryptographic identifier derived from a private key; used to verify signatures and derive addresses.
A public key is a cryptographic identifier derived from a private key using elliptic curve cryptography. It can be shared publicly without risking the associated funds and is used to verify digital signatures. In most cryptocurrencies, users actually share an address, which is derived from a hash of the public key and encoded for safety; the address is distinct from the raw public key.
"A Bitcoin Cash address, such as bitcoincash:qzmm5ffsl4x29wg50sn7rushcz4gxqpcas5f24432c, is an example of a public key. The 'bitcoincash:' prefix indicates the blockchain network it belongs to."
While sharing a public key does not risk the associated funds, reusing the same key for multiple transactions can compromise the user's privacy. Therefore, it's advisable to use wallets that generate a new address for each transaction. When an address is reused, anyone can trace the transaction history associated with that address on the public blockchain. Bitcoin Cash and many modern wallets implement Hierarchical Deterministic (HD) technology, which can automatically generate unique addresses for each transaction from a single seed phrase, significantly enhancing user privacy while maintaining convenience.
"To maintain privacy, it's a good practice to use a new address for each transaction. Many wallets automatically generate a new address for each transaction to help preserve your privacy."
Public keys are used in various scenarios, such as verifying transaction signatures, establishing secure channels, and participating in on-chain protocols. Unlike traditional banking systems where accounts are tied to personal information, cryptocurrency addressing allows users to receive funds without revealing their identity. Bitcoin Cash and other cryptocurrencies use different address formats to improve usability and prevent cross-chain errors. For instance, Bitcoin Cash adopted the "Cash Address" format (starting with 'bitcoincash:') to distinguish its addresses from Bitcoin (BTC).
"At the bottom of this page are three public keys (addresses) for donation wallets we control. Anyone can send us donations through them."
Despite being public, the security of a blockchain network relies on the computational impracticality of deriving the private key from its corresponding public key. This is based on the mathematical difficulty of the "discrete logarithm problem" in elliptic curve cryptography. Even with quantum computing advances, cryptocurrencies like Bitcoin Cash have the flexibility to implement quantum-resistant algorithms if necessary. Additionally, address formats include error-checking mechanisms to prevent users from sending funds to incorrectly typed addresses, further enhancing the security of transactions.
"The security of blockchain networks relies on the fact that, even though the public key is known, it's computationally impractical to derive the private key from it."
Related Terms
Private Key
→A cryptographic key used to sign blockchain transactions and derive public keys; ultimate proof of control over funds.
Address
→A public identifier used to receive cryptocurrency on a blockchain network.
Key pair
→A key pair consists of a private key and a corresponding public key used for digital signatures and addresses in cryptocurrencies.
Hash
→A hash is a fixed-size output produced by a one-way function that maps any input to a seemingly random value, used for integrity, addressing, and proof-of-work.
All terms and definitions may update as the Cryptionary improves.
