What is a cryptocurrency private key?

A cryptocurrency private key is a secret string of characters used to spend cryptocurrency, for example Bitcoin. When someone generates a Bitcoin address for themselves, they receive a public key and a private key. The public key is used to receive cryptocurrency and can be shared with the outside world. An example of a Bitcoin public key is:

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You can send this address to anyone who wants to transfer Bitcoin to you. When the wallet address is generated, a private key is also created. This is a 256-bit number consisting of 64 characters. There is only one private key per address and it is the unique key to the wallet. With this key you place a digital signature, proving that you are the owner of the wallet. An example of a private key is:

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It is extremely important that you keep the private key secret. Anyone with access to the private key can manage all the coins in the wallet. If an unauthorised person gains access to the private key, they can claim ownership of the wallet.

In the crypto world, the saying “Not your keys, not your coins” exists for a reason. If you store your crypto on an exchange, you do not manage the private keys yourself. Therefore, always choose a reliable exchange with a MiCA licence, such as Bitvavo, which offers protection of up to €100,000 on your account. Want to manage your own private keys? Then a cold wallet (hardware wallet) is the safest option.

What is the cryptocurrency private key used for?

The private key is used to carry out irreversible cryptocurrency transactions. It is the key to spending and sending cryptocurrency. The irreversibility is guaranteed by the signature attached to each transaction when the private key is used to send crypto.

The signature is unique for each transaction, even though they are generated with the same private key. This makes it impossible to copy or falsify transactions without the private key.