Baskadia

HmA bitcoin wallet is a software program that runs on a computer or a dedicated device that provides the functionality required to secure, send and receive bitcoin. Counterintuitively, the bitcoin itself is not stored in a wallet. Instead, the wallet secures the cryptographic keys — essentially a very specialized type of password — that proves the ownership of a specific amount of bitcoin on the Bitcoin network.

Anytime a bitcoin transaction is executed, ownership of the bitcoin transfers from the sender to the recipient, with the network designating the recipient’s keys as the new “password” for accessing the bitcoin.

Bitcoin uses a system called public-key cryptography (PKC) to preserve the integrity of its blockchain. Originally used to encrypt and decrypt messages, PKC is now commonly used on blockchains to secure transactions. This system allows only individuals with the right set of keys to access specific coins.

There are two types of keys required to own and execute bitcoin transactions: A private key and a public key. Both keys are strings of randomly generated alphanumeric characters used to encrypt and decrypt transactions. On the bitcoin network, PKC implements one-way mathematical functions that are easy to solve in one way and almost impossible to reverse.

The blockchain uses the one-way mathematical algorithm to create a public key from the private key. With this, it is practically impossible to regenerate the private key from the public key, meaning you’d better not lose your keys (or forget your password to access them). Also, you will receive a public address, which is simply the hashed or shorter form of your public key.

This address functions similarly to a house address and is shared to receive bitcoin. On the other hand, the private key must be kept hidden from prying eyes, just as your debit card’s PIN is meant for your eyes alone.

To execute transactions, you are required to use your private key and public key to encrypt and sign your Bitcoin transactions. Also, you have to include the public address of the recipient. With this, only the recipient with the right private key can unlock or claim the transferred bitcoin.