What is the Bitcoin Private Key?
Before we answer this question let us say that there are private and public bitcoin keys. We will begin by explaining what the difference between public and private bitcoin keys is.
Let us start by stating that this public and private keys thing is nothing bound to bitcoin. Using public and private keys is a technique of Cryptography invented in 1976. The problem in encrypting messages (or Bitcoins) is that one needs to encrypt it and also decrypt the message. But if you have only one key, then everybody sending a message to a person will be able to read all his messages. This is why there are two keys in the Bitcoin Blockchain. The basic principle is, that one key (the public one) is used to encrypt the message. And only the second key (the private one) is able to decrypt the message. Those keys are mathematically linked to each other, so for everything encrypted with the public one can be only decrypted with the private key.
So as a conclusion one can say: You only need the private key, the public key is derived from the public key. So even if you lose access to your wallet, you will be able to unlock and use your Bitcoins by knowing the public key.
The Private Key in the Bitcoin Blockchain
The Private key (Privkey) is initially generated randomly and is kept secret at all times. It is used by the current owner of Bitcoins to digitally sign a Bitcoin transaction, when he authorizes the transfer to the new owner. A transaction’s digital signature confirms ownership and can be used to verify that the transaction is authentic.
Here an awesome video which visually explains the concept of bitcoin public & private keys
How can we secure our Bitcoin Private Keys?
The answer to this question is: through BTC hardware wallets!
A Bitcoin Hardware Wallet is a special Bitcoin Wallet which stores all the private keys and Bitcoins from a user in a secure hardware device.
Private keys and Bitcoin Hardware Wallets
By storing the private key information within the microcontroller of the hardware wallet device, the key cannot be moved off the device in plain text, and it is immune to any kind of software attacks by malware or viruses.
What’s the advantage over standard software Bitcoin wallets?
These private keys can not be transferred out of the hardware wallet in plaintext. As opposed to a paper wallet, they can be used securely and interactively and don’t have to be imported to software wallets at any point.
The additional security features will vary by device but can include pass phrases, pin numbers, two-factor authentication methods and even biometrics in some cases. Read our article upon Bitcoin Hardware Wallets, if you are interested into more info about these so-called bitcoin vaults!
We believe that one should invest 10% of his capital in security. This is why we got ourselves one of the best bitcoin safes currently on the market – the Trezor!
So as summary, never tell anybody your Bitcoin private key!