Explaining the workings of the bitcoin wallet
Generally, we use wallets to store certain important things that we need to run our day-to-day workings. Crypto wallets work just like the physical wallets that we use for storage purposes, be it money, our identity proof, etc.
In cryptocurrency also there is a digital wallet that stores virtual money and other necessary things. It provides you with a unique address based on the cryptocurrency just like our bank accounts. But the address that is provided is a random one with random digits including alphabets and numbers.
Like a physical wallet, it stores the information with the help of public and private keys for carrying the digital transaction. These keys help in the encryption of the online data provided in the wallet.
You can also take the reference from the bit-qt to clarify your doubt as per your requirements.
How are these numbers generated?
Anyone can create a new wallet. To create a new wallet, you need private and public keys with certain mathematical algorithms. If we talk about Bitcoin and Ethereum it is done through the ‘Elliptical Curve Digital Signature Algorithm’. The algorithm provided will be divided into the associated keys.
These keys are further connected through mathematical equations. And in such a case you can derive a public key by taking the private key. But you cannot do the vice-versa thing in the other case. Only after taking the private key, you can derive a public key.
PURPOSES OF BOTH THESE KEYS:
As we know these two keys serve the purpose of encrypting the data provided. These keys are also called:
- “Asymmetric key”
- “Symmetric key”
Both these keys serve different purposes. If we talk about the public key, it becomes your wallet’s address which means a kind of bank account number. Whereas private keys give you ownership over your wallet stating that you are the trusted owner of your wallet.
This ownership entrusts you the right of spending your money, which means it enables you to trade through this key, whether you want to purchase, buy or sell any asset that belongs to you.
If we summarize the working of both these keys, a public key is a key that can be shared with anyone in the whole world, but a private key must be kept safe with that very owner of the wallet unless the owner wants other people to decide about what he should do with his money or lacks knowledge as to where he should spend it and any other thing like that.
TALKING ABOUT PAPER WALLET:
An offline wallet where no online sources are left for a certain time. In an offline wallet, you can give your address to other people so that they can transfer coins to it and after some time you can get back online and through using the private key provided to spend the coins further.
It is the safest technique for storing your coin. You can generate a wallet while being offline, and print your keys and vanish them from online sources, and transfer coins to it. This is probably one of the safest ways of securing your coins.
Conclusion
Hope this brief overview about working and making a crypto wallet added something more to your crypto knowledge. The topic enshrined above talks about the crypto wallet and how you can operate it through the keys provided.
Cryptocurrency has become the talk of the town for quite some time because it provides you with the uncontrolled security of your money. There are a lot more avenues where people are trying their luck in this digital world. Have a safe crypto journey.