In the crypto world, there are two types of keys: Private and Public. A public key is an address everyone can see and use for sending crypto assets to each other. A private key is like a password used to provide access to your owned crypto assets.
What is a private key?
A private key is a large, randomly-generated number with hundreds of digits and letters, which lets you access owned crypto. Each cryptocurrency has a different type of private key. Owning a cryptocurrency essentially means having a private key.
Most importantly, it is possible to recover a public key without much trouble by using a private key. However, it is impossible to recover a private key if you lost or forgot it. To not lose your crypto assets, keep your private key a secret and don’t share it with anyone.
Why is it important to secure a private key?
Most cryptocurrencies are decentralized, so no bank or any other institution in the middle holds your digital money. Your crypto assets are distributed across a network of computers via blockchain technology. So losing a PIN isn’t a disaster because a bank can provide a new one, but losing a private key means you won’t be able to access your cryptocurrencies forever.
Mistakes that cost a lot of money
Many cryptocurrencies are lost because of simple mistakes. Here are some stories about how losing private keys cost a lot of money.
Stefan Thomas
In 2011, the programmerStefan Thomaslost crypto just because he forgot the password, which would allow him to unlock a hard drive with cryptocurrency. He realized that around 10 years ago, at that time, coins were already worth around £100,000.
According to him, he felt like a complete idiot. After this incident, he suffered from depression and had trouble sleeping. Now he could be a crypto billionaire if only he could remember his password.
Davyd Arakhmia
A member of the Ukrainian parliament Davyd Arakhmia also faced some losses. He needed some free space on his hard disk with other information that he accidentally deleted a file with his private key from a hard drive with crypto assets. Because of this reckless decision, he lost around 400 Bitcoin. Now the worth would be more than 9 million US Dollars.
James Howells
Another unfortunate case of lost Bitcoin is about British computer engineer James Howells. He accidentally threw away his hard drive containing the private key into the trash. Howells had two identical hard drives: one was empty, and another contained 8,000 bitcoins. By mistake, he threw away the wrong hard drive and lost his Bitcoins, which he mined in 2009.
How to store cryptocurrency safely?
One of the solutions that could help you to protect yourself from these horrifying events and secure your cryptocurrency is crypto custody.
Simply put, crypto custodians are the third parties, that look after your crypto for you. Crypto custodians, not just secure crypto assets but also give the ability to recover the password to the account. Another advantage is that crypto custody is not hard to use for beginners.
FAQs
A cryptocurrency private key is basically an access code. A cryptocurrency private key is a randomly generated number usually converted to 64-digit hexadecimal format. Private keys represent control and ownership of cryptocurrency. If your keys are stolen or lost, your crypto is gone.
What happens if you lose your private key? ›
Your crypto assets are distributed across a network of computers via blockchain technology. So losing a PIN isn't a disaster because a bank can provide a new one, but losing a private key means you won't be able to access your cryptocurrencies forever. Many cryptocurrencies are lost because of simple mistakes.
What happens if private key is stolen? ›
🚨 The Private Key is only generated once and cannot be recovered if lost. It is important to securely save and store your Private Key. If you cannot find your Private Key, there are several things you can do: Try using Search in the File Explorer.
How to recover a lost private key? ›
Many wallets offer recovery options if you have your seed-phrase or private keys. If you've securely stored this information, you can restore access by entering the backup phrase or private key into the wallet software. No you can't get access to the account if you lost your private key and recovery phrase.
What would happen if someone found out your private key? ›
The private key is the most sensitive piece of information required to access and control your cryptocurrency holdings. If someone obtains your private key, they can use it to: 1. Send your cryptocurrencies to their own wallet address, effectively stealing your funds.
What happens if I lost my key? ›
Call a Locksmith or Roadside Assistance
They will drive to you and make a car key on the spot, even if you don't have the original. If you need a more technologically advanced key, like a key fob, key fob with switchblade key, transponder key or smart key, call roadside assistance instead of a locksmith.
What can people do with your private key? ›
Anyone with access to your private key can generate a digital signature for a transaction that steals the crypto from a blockchain account or exploits its permissions to hurt a project and its users. Individuals and blockchain projects alike are at risk of cybercriminals targeting them to steal their private keys.
Where is my private key stored? ›
The path to your private key is listed in your site's virtual host file. Navigate to the server block for your site (by default, it's located in the /var/www directory). Open the configuration file for your site and search for ssl_certificate_key which will show the path to your private key.
How much does a private key cost? ›
It's free, you don't need to pay anything. How much does it cost to get a private key for Bitcoin (BTC)? You do not need the key to receive bitcoins, but you must have the key associated with the address to spend the coins (send them to another address). creating a private/public key and bitcoin address is free.
What if I forgot my private key password? ›
The passphrase chosen at account request time is specific to the private key file, not your user account! If you have forgotten this passphrase, there is no way to reset it, and you will have to generate a new SSH key pair. and follow the instructions to generate your new SSH key pair.
The private key ensures only you can get through the front door. In the case of encrypted messages, you use this private key to decrypt messages.
How do I prove ownership of a private key? ›
This signature can be verified by using the client's certificate's public key. This lets the server know that the client has access to the private key of the certificate and thus owns the certificate.
What are the risks of private key? ›
The private portion should always be kept secure, while the public portion can be distributed to other users in the system. If the private key came into the hands of an attacker, they could use it impersonate a user and gain access to a system.
Can I generate a new private key for my certificate if I lose the old one? ›
If you can't find your private key, all is not lost. You can reissue the certificate using a new request and a new private key. This invalidates the previously generated certificate, so no worries if somebody else had the private key. If you are doing this on your computer, make sure you are working in the same scope.
What if I lost my ethereum private key? ›
Please take note that if a private key is lost, there is no way to either recover it or to regenerate it. However, aside from the private key, there are also other ways you can use to import your wallet address and ultimately recover the tokens in them.
How can I find my private key? ›
The path to your private key is listed in your site's virtual host file. Navigate to the server block for your site (by default, it's located in the /var/www directory). Open the configuration file for your site and search for ssl_certificate_key which will show the path to your private key.
