[Series: Crypto Q&A] Part 4/5: What is a Private Key? Why is Cloud Back-up important?

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In the last article, we have learned about the synchronization between Extensions and Wallet (Wallet). Today’s article we will help you better understand the Private Key Cloud Back-up feature and the importance of this feature.

What is a Private Key? Why use Private Key?

Non-custodial wallets are a special feature that only exists on cryptocurrencies. This type of wallet allows only the user to control and access the wallet through the Private Key [1]. A Private Key is a small piece of code that is paired with a Public Key to set up text encryption and decryption algorithms

PV comes in many forms (for example, numeric string, decimal, file format …). Users often create the Private Key as a long string of characters (also known as Mnemonic), generated randomly and cannot be easily guessed. Popular traditional private key storage mechanisms include key memory, cold storage, simple online storage, e-wallet storage and private key encryption [2].

When creating an account on the Blockchain platform, this Blockchain account will simultaneously create a chain of Public Key and Private Key respectively. In which, the Public Key is the address that everyone sees and the Private Key is only shared with the owner who created that account [3].

Private Key will make the control of your cryptocurrency and crypto wallet even stronger with an extremely high level of security. As long as you have a Private Key, you are completely free to own and use your money freely without being bound by any other third party (for example, a bank or other organization interfering with the transaction. translation).

Difficulties of using Private Key

Using crypto wallets will become much more difficult to use than traditional financial accounts. Each wallet created will have its own Private Key and managing multiple Private Keys at the same time becomes complicated and confusing for users [4]. This is even a major hurdle for users when considering switching from traditional payment methods to crypto wallets.

Private Key storage has always been a headache for users. Because if they, unfortunately, users log out of their accounts. Forget or lose their PV, that means they will also lose access to… their money… Forever.

Some users have also shared ways to keep their PV, such as: Save it in the phone notes, keep it on the computer’s hard drive, split it into small pieces, and save it on different devices like a dropbox. or google drive or write it down and then store it in secret places in the house, company … Especially, it is important to note that users must create and store PV in places without the network (cold wallet) to ensure No hacker can penetrate and use his Private Key.

The solution for storing Private Key is simpler and easier

The simple solution to this problem is an application that adds a simple Private Key storage function and is more secure.

We went through a series of articles about the important features to have when using Wallet and Extensions. In the next article, we will go to learn about a Wallet and Extension product that has all the above features and is user-friendly.

Stay tuned and immediately join the following groups to stay up to date with the latest information on crypto market trends as well as be supported when facing problems and difficulties in this area:

Group ezDeFi global: https://t.me/ezdefiglobal

Fanpage ezDeFi global: https://www.facebook.com/ezdefi

References

[1] Khandelwal, Rachana. 2019. “Taxation of Cryptocurrency Hard Forks.” Recommended Citation Khandelwal 8 (1): 1–8.https://scholarworks.sjsu.edu/cgi/viewcontent.cgi?article=1124&context=sjsumstjournal.

[2] Aydar, Mehmet, Salih Cemil Cetin, Serkan Ayvaz, and Betul Aygun. 2019. “Private Key Encryption and Recovery in Blockchain,” 1–24.http://arxiv.org/abs/1907.04156.

[3] He, Xiaojian, Jinfu Lin, Kangzi Li, and Ximeng Chen. “A Novel Cryptocurrency Wallet Management Scheme Based on Decentralized Multi-Constrained Derangement.” IEEE Access 7 (2019): 185250–63. https://doi.org/10.1109/access.2019.2961183.

[4] Fröhlich, Michael, Felix Gutjahr, and Florian Alt. “Don’t Lose Your Coin! Investigating Security Practices of Cryptocurrency Users. ” Proceedings of the 2020 ACM Designing Interactive Systems Conference, 2020. https://doi.org/10.1145/3357236.3395535.

 

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