Glossary

Private Key/Secret Key

Easy

A piece of code generated in asymmetric-key encryption process, paired with a public key, to be used in decrypting information hashed with the public key.

What Is a Private Key/Secret Key?

A private key generally refers to an alphanumeric string that is generated at the creation of a crypto wallet address and serves as its password or the access code. Whoever has access to a private key has absolute control over its corresponding wallet, access to the funds contained within, and can transfer or trade assets and use the account for other purposes. 
Thanks to the irreversible nature of blockchain and the cryptographic derivation of private keys, it is impossible to change private keys. Therefore, once a user suspects that an unauthorized entity or person knows his private key, the only possible way to secure the funds is through creation of, and transfer to, a new wallet. 
There are several ways in which the private keys are stored. The basic and the most vulnerable method is the direct seed code, for instance “e0c9795a7fcf4ad2b7a257952dc5151ab1c865a02d88a41b7885b5f4e15b5879”. 

Some wallets also use general encrypted files accessible through a password, which is simply a level above raw key. However, the most common method is through generation of mnemonic 12-24 phrases using the BIP39 protocol. This makes them easier to remember but hard to guess; e.g “shampoo plane stingray gully mollusk anyway clarify observing echo bazooka heading replica.” 

Interestingly, some wallets like the CoolWallet S hardware wallet uses numbers instead of words for its recovery seed and then uses a checksum to verify that it’s been correctly recorded at the end. This is to help non-English speakers avoid spelling mistakes such as “plan” instead of “plane.” Such a small mistake could make it impossible to access your wallet. 

Regardless of the manner of generation and storage, it’s absolutely critical to safeguard private keys properly. Users are advised to store them offline instead of keeping them on an online device. 

Another option is to write them on pieces of paper and keep them inside safes or deposit boxes. The most common way to safeguard them is by using hardware wallets in order for them to be kept offline. There is also a niche category of users that store them on specially designed holders made of titanium and other fire resistant robust materials.

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