Understanding The Concept Of Private Keys In Terms Of Ethereum

• To access a private key, the user must have their own digital wallet like Coinbase, Metamask, Atomic Wallet, etc.
• A private key on Ethereum is a 42 hexadecimal character long alphanumeric code that starts with 0x and is followed by 40 random characters, making it as secure as possible.

What Is A Private Key?

A set of digital keys manages Ethereum and Bitcoin. Cryptocurrencies can be deposited using public addresses; however, a user needs to have a unique private key to access them.

Private keys are alphanumeric codes in cryptography used to authenticate transactions and prove ownership of blockchain-based digital assets. Private keys are pivotal for any cryptocurrency network because their encrypted properties protect user data from theft and bar prohibited access to the user’s wallet.

Public keys can be created from private keys, however, the opposite is unattainable. Public addresses are like mailboxes, and private keys are the keys to accessing the content inside those mailboxes.

Although private keys are essential to accessing public addresses, it’s not mandatory for a user to remember them. Here, digital wallets come into play. These digital wallets automatically create and store private keys for their owners. At the time of transaction processing, these wallets use private keys to create a digital signature and complete the transaction.

Ethereum Wallet Addresses

Ethereum wallets are a type of software network that enables users to interact with their Ethereum account on the Ethereum network. These wallets are managed using a password-like code called a ‘private key.’ A user can only perform transactions, and send or receive funds through this private key. 

For safety and security reasons, these private keys are exclusive to their owner only, because if anyone else has access to the owner’s private key, then that person can use it to access the owner’s wallet as well as their funds.

Talking about Ethereum wallet addresses, they are an alphanumeric identifying tool that contains 42 hexadecimal characters starting with 0x and 40 other random characters. These addresses are used to send and receive transactions and they hold balances as well.

Types Of Accounts On The Ethereum Network

These Ethereum accounts can be employed to create smart contracts, interact with decentralized apps, and ensure the seamless functioning of applications without the risk of fraud, downtime, or any third-party interference. Following are the types of Ethereum accounts.

1. Externally Owned Accounts (EOAs) – externally owned accounts are accounts that don’t have a smart contract code. However, these externally owned accounts have their own private key that allows a user to access their account and control access to their wallet and funds.

Here, only externally created accounts can initiate a payment and the user can use their private key to digitally sign the transaction to complete the transaction.

2. Contract Accounts – Unlike EOAs, contract accounts have smart contract codes instead of private keys. Due to the absence of private keys, the transactions on these accounts are carried out by smart contract code. Moreover, they also cannot initiate any transaction due to the unavailability of a private key and can only be activated by sending ether (ETH) into them.