Public and Private Keys vs. Public Address
To understand bitcoin and its intricate structure, you need to know the difference between three terms whose definitions are often, easily (and mistakenly), interchanged.
In their purest form, private keys are 256-bit numbers that are generated randomly and used to authorise the spending of bitcoins.
‘Bit’ is short for binary digit and always represented by one of the two binary figures: a 0 or a 1.
Since the number of possible 256-bit combinations is extremely large, a simpler system has been created to represent the private key.
A 64-character hexadecimal system using letters a-f and numbers 1-9, like so:
Derived from the mathematical theory of elliptic curve multiplication, public keys are created from private keys.
They are used to confirm that the data sent in the blockchain is authentic; in other words that it comes from the owner of the specific private key.
Thanks to the public key, the private key takes the shape of a digital signature, without ever being publicly revealed.
The receiver, or any peer in the network, will only see the digital signature and public key.
Example of a Public Key: 030589ee559348bd6a7325994f9c8eff12bd5d73cc683142bd0dd1a17abc99b0dc
Also known as the bitcoin address, the public address is also a major identifier for a transaction and it’s derived from the public key.
In fact, this is the information that people need to input if they wish to send you bitcoin.
Each bitcoin transaction carries with it a unique public address, generated by applying the public key into a cryptographic algorithm called Secure Hash Algorithm (SHA).
Example of a Public Address: 1J7mdgA5rbQyUHE2NYd5x39WVBWK7AfsLpEo6XZy