A private key is often said to be the critical factor that determines your control over the funds in a wallet. In blockchain transactions, the private key is used to generate the necessary signature for paying with cryptocurrency, thereby proving ownership of the funds. It’s crucial to keep the private key confidential because if it’s exposed to a third party, it’s akin to handing over the assets protected by that private key.
In reality, the private key is not stored on the network but is generated and stored by the user in a file or a simple database, known as a wallet. The private keys stored in a user’s wallet are entirely independent, can be generated and managed by the user’s wallet software, and do not require a blockchain or network connection. The user’s wallet address is created by using the private key to generate a public key through elliptic curve cryptography, and then this public key is used to generate the address.