If you've been looking for a crypto wallet, you may have heard that it comes with one key. In fact, it comes with two keys: a public key and a private key. Both are essential and perform different, complementary tasks.
Public key
The public key is used to send cryptocurrencies to a wallet. The private key is used to verify transactions and prove ownership of a blockchain address. For example, if someone sends you a bitcoin (BTC), a private key is needed to "unlock" that transaction and prove that you are now the owner of that bitcoin.
Think of your public key as your mailing address. Anyone can view it and send things, in this case cryptocurrencies, to that address. It's similar to giving your checking account number and bank routing number to set up a direct transfer - you can give this information to anyone, but it won't allow them to withdraw money or otherwise log into your account.
Private key
The private key, on the other hand, is only for the owner of the wallet. The private key acts as a password for your crypto wallet and should be kept secret. You need to be aware that if someone finds out your private key, they will have access to all the cryptocurrencies in that wallet and can do whatever they want with them.
Private keys are numeric codes - but you may never see your private key. To make things more user-friendly, many wallet providers encrypt your private key in a way that makes it easier to record and remember.
Many wallets use a "seed phrase," also known as a "secret recovery phrase," to unlock your wallet. When you open a crypto wallet with MetaMask, you are assigned a series of random words that you use to unlock your funds. Your private key is hidden in the software behind this user-friendly sequence of words.
However, if you store your cryptocurrencies in an exchange wallet (like Coinbase or Binance) or with a custodian, that company holds your private key for you. Strictly speaking, it would control your funds on your behalf.
Learn more: custodial vs. non-custodial wallets
Technically, the function of the private key is to "sign" transactions using your funds. Transactions that use your credit cannot be validated by the network without your private key. The public key encrypts transactions that can only be decrypted with the corresponding private key. This technology is called public-key cryptography, sometimes abbreviated as PKC or asymmetric cryptography.
How to store your private key
One final note that cannot be stressed enough is that you must keep your private key or seed phrase, or both, secure and secret. Write it down and keep it in multiple places, as there is no way to recover it if you lose it or it falls into the wrong hands. Do not take a screenshot of it or photograph it with your cell phone, as these digital copies are often the target of hackers.