The verifying key is always public as it can be used by anyone to do the verification. The verification, where the signed message and the public key are used to check whether the digital signature has been made with the associated private key.Īs you probably see it by now, the key concepts to grasp in this scheme are the public key, the private key and the digital signature.The signature, where an owner uses his private key to produce a digital signature.It is called a signature scheme, which is made of two parts: Other cryptocurrencies might use different cryptographic algorithms, but they all achieve the same goal.Īn important concept to understand how cryptography is applied to cryptocurrency. This algorithm ensures that "funds" on the Bitcoin network can only be spent by their rightful owner and not by anyone else. With Bitcoin, a specific cryptographic algorithm is used, which is called Elliptic Curve Digital Signature Algorithm, or ECDSA.
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Public/private key cryptographyĬryptocurrencies (and that is where their name comes from) are based on cryptography, which can be seen as the art of making mathematical problems very difficult to solve. In the case of Bitcoin and any other cryptocurrency, that control is wielded through electronic signatures.
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As an "owner" you are not just entitled to owning it, you can take actual ownership of it.Ī good illustration is the comparison of Bitcoin and gold: although the cryptocurrency represents an abstract, digital form of money, it can be handled directly by its holder just like you can own and control a piece of gold by yourself. A cryptocurrency does not "exist" as an account entry in a centralized balance sheet (like money in a bank account), but as tokens residing on a distributed ledger.īecause of that nature, a cryptocurrency can be possessed independently of any third party and can be owned self-sovereignly.
#Blockchain wallet private key full
A defining feature of cryptocurrencies is the fact that they are true digital bearer instruments, meaning that you can exert full and complete ownership over them.