Not Your Keys, Not Your Crypto.

Most cryptocurrency wallets store private keys, which allow users to access their funds. A private key is essentially a gateway to your cryptocurrency, and a malicious individual who has obtained access to your private key can withdraw large sums from your wallet without your permission.

Private keys are Long lines of letters and numbers used to authorize wallet withdrawals and digitally sign transactions. Choose a random 32-byte number to generate a private key (generated by a strong CSPRNG)

The length of a private key can vary between cryptocurrencies. Bitcoin, for example, employs 256-bit private keys, which are extremely long and complex. Private keys can also be represented as QR codes or 64-bit hexadecimal codes.

Each crypto wallet owner has their own unique private key, which is kept in their crypto wallet.

​Many well-known crypto exchanges, such as Binance and Coinbase, are custodial. Nonetheless, many providers, such as TrustWallet, choose to provide their users with a non-custodial service in which the user is the sole owner of the private key.

Owners of cryptocurrency wallets also have public keys, which other users can see and share anywhere. The private key is used to generate public keys, which are then shortened into wallet addresses that can be used to deposit funds into someone else's wallet. They also secure transactions by encrypting them.

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What’s Asymmetric Cryptography?

Asymmetric cryptography is advantageous because it employs two distinct keys: a private key and a public key. The private key is used for message signing and decryption, while the public key is used for crypto signature validation and data encryption.

Because of the use of asymmetric keys, public key cryptography is well suited for blockchain technology.

The actions performed with the private key can be validated with the corresponding public key. Asymmetric cryptography is used in blockchain technology for identity management and transaction authentication.

To manage 'addresses' on the blockchain, most cryptocurrencies employ keypairs (and thus asymmetric cryptography). The public key is the address that 'holds' the tokens and is visible to anyone.

​The private key is used to gain access to the address and to authorize actions on behalf of the 'address.'

Ethereum employs elliptic curve cryptography (ECC): elliptic curve cryptography, specifically the Elliptic Curve Digital Signature Algorithm (ECDSA) and the secp256k1 elliptic curve.

ECDSA is an algorithm designed specifically for signing and verifying data, as well as recovering public keys from signatures.

When you want to send a transaction, the entire transaction is first signed, resulting in a signature {r, s, v}. This signature is added to the transaction, which can then be broadcast to the network.

​Transactions do not include the address they were sent from. Instead, the address is recovered from the signature using ECDSA.

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Could A Crypto Hardware Wallet Be Useful?

Transactions are still signed with a private key when using a hardware wallet, secret recovery phrase, or keystore file.

​You cannot directly sign a transaction using something like a secret recovery phrase. In these cases, the private key is derived from the hardware wallet, secret recovery phrase, or keystore file, which contains a slew of cryptographic functions in and of itself.

​Derivation occurs on the device itself in hardware wallets, so the private key (or secret recovery phrase) never leaves the device.

​Crypto wallets are classified into two types: software-based hot wallets and physical cold wallets. Hardware wallets are the most secure method of storing cryptocurrencies. They function by storing your private keys in a physical device (usually a USB or Bluetooth device).

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The Function of Crypto Seed Phrase

A Crypto seed phrase is a mnemonic representation of a random number that is used to create a private key for a user's crypto wallet using advanced cryptography methods (along with a password and HD path).

The phrase is composed of a sequence of 12 or 24 words chosen at random from a list of 2,048 words. The crypto wallet can then send coins using that private key.
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Software wallets, mobile wallets, and hardware wallets all use wallet seeds as backups. Users can restore their private keys using this string of words if something happens to their wallet or if they forget their PIN or password.

​In the event that a user's cryptocurrency wallet is lost, stolen, or damaged, crypto seeds allow them to restore their balances. To recover their cryptocurrency, the wallet holder can open a new wallet and enter their old seed phrase.
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When first setting up their wallets, users are frequently required to backup a copy of their seed phrase. If they fail to do so, some wallets allow you to find or export the seed phrase.

It is critical not to reveal the seed phrase to anyone.