Privacy is an important factor in crypto. This is the reason every crypto wallet has a private key. If a threat actor can access your private keys, you can safely consider your crypto gone.
In fact, a hacker accessed the private keys behind BitMart, a crypto exchange, and stole almost $200 million in 2021. Yes, it can be that fatal.
As a crypto trader, you must know how to keep your private keys safely. Do not learn the hard way. This newsletter will teach you about private keys and how to keep them like a giga chad.
What are private keys though?
Private keys are a set of randomly generated figures confirming a wallet’s ownership. They contain digital signatures that must be appended before anyone can transfer funds from a wallet.
You need to understand the role of public keys before you will fully grasp private keys. Public keys are a set of alpha-numeric characters that serve as an address of a wallet. So A can send funds to the public keys of B.
Think of this scenario:
Public keys are the address to a house, while a private key is the master key that gives anyone the power to open anywhere in the house and be in control.
In short, whoever is in charge of the private keys is in charge of the funds.
How are private keys generated?
Private keys are randomly generated from a range of numbers, usually between 1 and 2²⁵⁶. The point of entropy is where the randomness kicks off. (If you have ever taken a physics course, “entropy” should ring a bell)
The in-built randomness generator of each blockchain gets points of entropies. Generally, most blockchains use the Elliptic Curve Cryptography behind the hood for this randomness.
Once a random number is generated in conformity with the SHA256 algo. Other things being equal, 256-bit secure numbers will be derived. The 256-bit numbers are the private keys.
How can you protect your private keys?
From what we have discussed so far, you know that you should not toy with your private keys. So, how, then, do you keep them?
Hackers have various social engineering schemes they use to steal private keys. You should check various checklists to be safer in the crypto-sphere:
- Never store your private keys plainly on the internet
- Do not auto-save your private keys for whatever reason
- Never take a screenshot of your private keys.
So what do you do? We recommend that you write or print them out. At the same time, ensure no one else can access them.
That will be all for this issue. We are sure you now have a smarter approach to securely keeping your private keys.
At ZKT, we aim to educate everyone about privacy in crypto. Kindly share this issue with fellow degens. Wagmi!