They are neither trained in martial arts nor carry a gun. But they act as your guards. And their weapon of choice is lines of code. Private keys are seemingly irrelevant strings of letters and numbers. However, they play a significant role in cryptocurrency: they protect your funds.
Why go into cryptocurrency? One of the reasons is that you can transfer your assets without a central clearing authority. It means that no bank will see you sending funds to another person.
Ah, decentralization in its purest form!
However, it would be misleading to conclude that cryptocurrency is a do-whatever-you-want zone. On the contrary, all transactions must be approved through blockchain.
For clarity, blockchain is something of a digital ledger that contains the entire history of transactions. It’s every accountant’s dream to have a resource like that.
Entering the public key cryptography
On the blockchain, you oversee your funds. It’s a great privilege, but the responsibility is even greater. Why is that?
Quick answer: your funds need an efficient security mechanism to be safe.
The proper solution is public-key cryptography. It’s a mathematical function that comes in handy when you look to encode messages. But it also works superbly well for encrypting and decrypting transactions.
Public key cryptography has been in use since Bitcoin came along in 2009. The mother of all coins uses the ECDSA cryptographic algorithm.
What are public and private keys?
The public key is created from the private key. This is feasible through advanced mathematics. The public key address is then generated from the public key.
One can compare a public key address to a bank account number. It identifies you and allows you to send and receive crypto funds.
A private key is therefore like a passcode or PIN for your account. It safeguards your funds from falling into the wrong hands.
Digitally signing a transaction
It’s fair to say that someone who owns coins on the blockchain has them encrypted to a public key address.
Corresponding private keys are necessary to sign a transaction. It means that you must use a private key to move the encrypted funds to one particular public key.
This is called the digital signing of a transaction.
About Bitcoin Vault (BTCV)
Let’s take a closer look at how private keys work when it comes to Bitcoin Vault. Bitcoin is an incredible coin that aims to establish a new quality of transactions.
It also features an entire ecosystem of applications that support the cryptocurrency, and a detailed roadmap with many exciting features yet to be implemented.
BTCV stands out with its high standards of security ensured through its unique 3-Key Security Solution.
Reverse and cancel transactions
The 3-Key Security Solution is a combination of private keys designed for different types of transactions.
The first key initiates the transaction (Standard Transaction Key). But if you want to cancel the transfer, you can easily do it through the second key (Cancel Transaction Key). And the third key gives users the possibility to make Secure Fast transactions and transfer BTCV in a matter of minutes (Fast Transaction Key).
The noteworthy thing is that cancelation is possible only within the first 24 hours. That’s the window available for generating 144 blocks on the blockchain. It can come in handy if there is a hack, a theft of private keys, a technical issue, or a simple mistake that leads to funds being sent to the wrong address.
Both Gold Wallet and Electrum Vault act as controllers to operate the 3-Key Security Solution.
If you have any funds, private keys are here to protect them. They act as gatekeepers to your wealth.
The creators of Bitcoin Vault have developed private-key technology to an unprecedented level. BTCV’s 3-Key Security Solution stands for a higher standard of security for crypto transactions.