Public Key

A public key, often referred to as an address in the context of cryptocurrencies, is a cryptographic identifier used for receiving transactions on a blockchain network. It is derived from a private key using elliptic curve cryptography and can be shared publicly without risking the associated funds. Public keys serve as destinations for transactions, similar to how an email address works for receiving messages. In most cryptocurrencies, the public key undergoes additional transformations (like hashing) to create the actual address that users share.

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.

Public keys are used in various scenarios, such as receiving payments, verifying the sender of a message, and participating in public blockchain operations. Unlike traditional banking systems where accounts are tied to personal information, cryptocurrency public keys allow users to receive funds without revealing their identity. Bitcoin Cash and other cryptocurrencies use different address formats to improve usability and prevent cross-chain transaction errors. For instance, Bitcoin Cash adopted the "Cash Address" format (starting with 'bitcoincash:') to distinguish its addresses from Bitcoin (BTC) and reduce the risk of sending funds to the wrong chain.

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.