A signature key refers to the private key, which is an essential component of the public key cryptography (or asymmetric cryptography) on which blockchain is based. It is fundamental to the security and functionality of digital transactions.
What is a private key (or signature key)?
A private key is essentially a long and secret string of alphanumeric characters (a very large number), randomly generated, that is the ultimate control over the funds associated with a crypto wallet. Think of it as an ultra-complex and secret password that gives you absolute access and control over your cryptocurrency.
How a signature key works
The system works in pairs with a public key:
Generating the key pair: When you create your crypto wallet, a unique key pair is generated:
- The private key (signature key) : This is generated first and must be kept ABSOLUTELY SECRET. If someone else has access to your private key, they can spend or move your funds.
- Public key : This is mathematically derived from the private key and is public. Your wallet address (similar to a bank account number) is generated from your public key, which you can share with anyone you wish to send cryptocurrency to. It is important to note that although the public key is derived from the private key, it is almost impossible to derive the private key from the public key.
Signing transactions: When you want to send cryptocurrency to someone, you initiate a transaction. This transaction (which includes details such as the amount, the recipient and a hash of the transaction) is then digitally signed using your private key.
- The digital signature is cryptographic proof that you are the owner of the funds and that you authorized the transaction. This signature is unique for each transaction and cannot be replicated without the private key.
Transaction verification: Once signed, the transaction is transmitted to the blockchain network. Nodes in the network (miners or validators) use your public key (which is visible on the blockchain) to verify the validity of the digital signature.
- If the signature is valid and matches your public key, it means that the transaction has been authorized by the rightful owner of the funds and has not been altered along the way.
- This process ensures data integrity (the transaction has not been altered), authentication (you are the one who initiated it) and non-repudiation (you cannot deny that you signed the transaction as long as your private key has not been compromised).
Why is the “signature key” (private key) important?
- Security: A signature key is the central pillar of the security of your funds. Without it, no one can move the cryptocurrency in your wallet.
- Total control: You have direct and absolute control over your assets, without depending on a bank or centralized intermediary.
- Irrevocability: Once signed and confirmed on the blockchain, a transaction is irrevocable. This is precisely due to the cryptographic power of the private key.
In conclusion, the signature key (private key) is the element that gives you ownership and control over your cryptocurrency, allowing you to initiate and authorize transactions in a secure and verifiable way on the blockchain. Protecting this key is of utmost importance in the cryptocurrency world. If you would like to delve even deeper into the topic of cryptocurrency security, as well as other essential aspects of blockchain technology, we invite you to explore the Abarai blog, where you will find a wealth of dedicated articles. Also, if you’re interested in a specific cryptocurrency, you can find out its up-to-date price here.