Summary

Signing Transactions: You can sign and verify transactions using your private key. Keep your private key safe, as other entities or individuals cannot transact without your permission. Mnemonic Phrase: A mnemonic phrase consists of 12-24 randomly generated words, an easy-to-understand form of a private key. This format is user-friendly for memorization, secure storage, and recovery. Receiving Digital Currencies: Wallets create new receiving addresses using the public key hash, allowing you to privately transact digital currencies. Importing Wallets: As long as you have a self-custody wallet, you can import it onto any device using your mnemonic phrase or private key.

How Do Encryption Keys Work? All cryptocurrencies coexist with public and private addresses:

Public Address: Anyone can deposit into a public address, and it can be used to generate other receiving addresses. Private Key: The holder of the private key can withdraw assets and sign transactions. For example, a __ address is like a locked mailbox; anyone can post letters into it, but only the private key holder can open it.

What is a Private Key? Simply put, a private key is a randomly generated complex password. With a private key, you can use your digital currency. If someone else knows your private key, they can access all your assets and even sign and execute transactions.

It is crucial to keep your digital currency secure by safely storing your private key. A private key typically looks like this:

xprv9s21ZrQH143K49eAc63EJwi4uct9JvZnkxEGrz7FBQA1YgNZ5dcbZU3Lrgk1wYxVPZsek7ymmhZJc38zdM8uaQ5bYUiGyrEviNnxRXsd8e6 Looks hard to remember, right? It’s generally not recommended to store private keys online, as they need encryption or to be presented in a readable format. Hence, mnemonic phrases become useful.

What is a Mnemonic Phrase? A mnemonic phrase is an easily readable personal private key. Typically, it consists of 12-24 random words from an approved list. When creating a new wallet, the mnemonic phrase appears as follows:

ginger fiber talk margin fresh hundred oxygen aim trim crisp state artwork sunny crack clock patch minor claw catch theory theory father razor edge We will ask you to verify the mnemonic phrase for your Web3 wallet to ensure you have correctly memorized it. Remember not to screenshot or store the mnemonic phrase online to reduce the risk of theft.

What is a Passphrase? Some wallet providers allow you to optionally add a passphrase at the end of your mnemonic phrase for enhanced security. A passphrase supports all alphanumeric and special characters, allowing you to customize its complexity.

With a passphrase, even if someone steals your mnemonic phrase, they cannot access your funds as long as the passphrase is not leaked.

Like all secure wallet practices, the passphrase should be kept safe, preferably stored offline.

What is a Public Key? When a digital currency wallet is generated, a public key is created along with the private key. However, the public key does not require the same level of security scrutiny as the private key. In fact, in the early stages of Bitcoin, the public key was often used as the receiving address.

Blockchain networks use public keys to verify the digital signatures created with your private key during transactions. Due to complex encryption technology, it is easy to verify if a public key corresponds to the private key that signed a transaction. However, trying to derive the private key from a specific public key is nearly impossible. Thus, safely storing your private key is crucial.

For users, there is little need to interact much with their public key. Most current digital currency storage solutions use a cryptographic process called “hashing” to create multiple receiving addresses from a single private key. It is recommended to use a new receiving address for each transaction to help protect your privacy.

Where Are Various Keys Stored? Thanks to digital currency wallets like Web3 wallets, you can create and store keys yourself. Since private keys are lengthy, storing them in a wallet facilitates easy transaction signing without the need to memorize these strings. When creating a wallet, you will be asked to create a password. With this password, you can access your wallet without repeatedly entering the mnemonic phrase.

To ensure the safety of your private key, it is advisable to write down or physically back up your mnemonic phrase and store it securely.

How to Transfer a Private Key to Another Device? To transfer an existing wallet to another device, such as using your Web3 wallet as both a browser plugin and on a mobile device, simply import your private key.

The easiest way is to prepare your mnemonic phrase and import it into the chosen wallet provider. This allows you to view all your assets with just one import. Alternatively, you can export the private key for each cryptocurrency you hold.