A public key coupled with a private key represents a key cryptographic innovation that allows for a safe usage of cryptocurrencies. To truly secure your cryptocurrencies, you must secure your private keys and, more generally, your seed phrase.
Public and private keys: what are they?
Let’s take the example of Bitcoin. Your BTC address is linked to your public key. You can share it so that other addresses can interact with yours, e.g., by sending BTC to you.
The private key, on the other hand, as suggested by its name, must not be shared with anyone. It creates your public keys. Instead of having to store all your private keys in your wallet, it is possible to group and secure them with only one “password”. This very often takes the form of a seed phrase.
So what is a seed phrase?
A seed phrase is a sequence of words, often 12 or 24 words, that serves as a recovery key for your wallet. As blockchain aims to be decentralized, intermediaries are often removed. If you own your wallet’s private key (and hence your cryptos), no one will be able to recover your funds without your seed phrase (e.g., if you were to lose your seed phrase, you would not have access to your funds anymore).
Let’s take the example of a Ledger. This secure hardware wallet enables you to use your private keys without connecting them to the rest of the world, thus limiting the risk of hacking. If you plug your Ledger wallet into your computer and use a password to log on, you can safely approve transactions and move assets.
However, if you were to lose your wallet or the password that enables you to log on, no banker or employee from Ledger would be able to help. Only your seed phrase can help you recover your wallet – this can be done from any device.
Your seed phrase thus enables you to access your wallet from anywhere, but, in the event of a loss of wallet or password, if you do not have access to your seed phrase, you won’t have access to your assets.
Note that anyone can use your seed phrase to recover your wallet and steal your assets. You must safely store your seed phrase and never share it!
One key sentence can summarize safety in crypto: the person owning your seed phrase owns your crypto.