You may have heard the phrase "not your keys, not your coins." In the world of cryptocurrency, this refers to self-custody of crypto assets by holding private keys, giving users full control over their funds.
This guide explains exactly what private and public keys are and how to use them to securely manage your digital assets.
TL;DR
- Signing Transactions: A private key allows you to sign and verify transactions. When you securely hold your private key, no other individual or organization can conduct transactions without your permission.
- Seed Phrase: Seed phrases represent private keys using a randomly generated set of 12–24 human-readable words. This makes memorizing, securing, and recovering your private keys easier.
- Receiving Crypto: Wallets generate new receiving addresses hashed from your public key, enabling private crypto transactions.
- Importing Your Wallet: When you self-custody your crypto, you can import your wallet to any device using your seed phrase or private key.
How Do Cryptographic Keys Work?
For all cryptocurrencies, there is a pair of public and private addresses:
- A public address allows anyone to deposit coins or tokens and can also be used to generate additional receiving addresses.
- A private key enables those with access to withdraw assets and sign transactions.
Think of it like this: a public address is like a locked mailbox where anyone can drop mail, while the private key allows the owner to unlock it.
What Is a Private Key?
Simply put, a private key is like a complex, randomly generated password that grants access to your cryptocurrency. Anyone who knows your private key can access all your assets and tokens—including the ability to sign and execute transactions.
To keep your crypto safe, it’s essential to protect your private keys. Here’s an example of a private key:
xprv9s21ZrQH143K49eAc63EJwi4uct9JvZnkxEGrz7FBQA1YgNZ5dcbZU3Lrgk1wYxVPZsek7ymmhZJc38zdM8uaQ5bYUiGyrEviNnxRXsd8e6It’s nearly impossible to memorize, right? Generally, you should not store private keys online. Instead, they should be encrypted or represented in a human-readable format. This is where seed phrases come in.
What Is a Seed Phrase?
Seed phrases are private keys represented in a human-readable format. Typically, they consist of 12–24 randomly generated words from a pre-approved list. When you create a new wallet, your seed phrase might look like this:
ginger fiber talk margin fresh hundred oxygen aim trim crisp state artwork sunny crack clock patch minor claw catch theory theory father razor edgeWhen using a wallet like OKX, you’ll be asked to verify your seed phrase to ensure you’ve written it down correctly. It’s important not to take screenshots or store your seed phrase online to reduce the risk of exposure.
What Is a Passphrase?
Some wallet providers offer an additional security layer by allowing you to add an optional passphrase at the end of your seed phrase. This passphrase usually supports letters, numbers, and special characters, letting you customize its complexity.
With a passphrase, even if someone obtains your seed phrase, they still cannot access your funds without knowing your passphrase.
As with all good wallet security practices, it’s essential to keep your passphrase safe, preferably offline.
What Is a Public Key?
A public key is generated alongside your private key during wallet creation but doesn’t require the same level of security. In fact, in Bitcoin’s early days, public keys were often used as receiving addresses.
The blockchain network uses your public key to verify the digital signature you create with your private key when making a transaction. Due to complex cryptography, it’s easy to verify that a public key corresponds to the private key that signed a transaction. However, it’s nearly impossible to derive a private key from a given public key. This is why keeping your private keys secure is crucial.
As a user, you may not need to interact much with your public key. Today, most crypto storage solutions use a cryptographic process called hashing to generate multiple receiving addresses from one public key. You should use a new receiving address for each transaction to maintain privacy.
Where Are My Keys Stored?
Crypto wallets like OKX help you create and store keys. Since private keys are long, storing them in a wallet makes signing transactions easy without memorizing the string. When creating a wallet, you’ll set a password—allowing access without repeatedly entering your seed phrase.
To keep private keys secure, write your seed phrase offline or engrave it on metal and store it in a safe place.
How to Transfer a Private Key to Another Device
If you have an existing wallet and want to move to another device—for example, OKX Wallet is available as a browser extension and mobile app—you can transfer it by importing your private key.
The easiest way is to have your seed phrase ready and import it into your chosen wallet provider. This lets you view all your assets with one entry. Alternatively, you can export private keys for each cryptocurrency you own.
For guidance on exporting and importing private keys with OKX Wallet, 👉 explore detailed step-by-step instructions here.
Frequently Asked Questions
What happens if I lose my private key?
If you lose your private key and haven’t backed up your seed phrase, you may permanently lose access to your funds. Always store your seed phrase securely offline.
Can someone steal my crypto with my public key?
No, a public key alone cannot be used to withdraw funds. However, it can generate receiving addresses, so it’s still good practice to keep it relatively private.
Are seed phrases the same for all wallets?
Seed phrases follow industry standards (BIP-39), so you can often import them into different wallet providers, but always check compatibility.
How often should I create new receiving addresses?
Using a new address for each transaction enhances privacy. Many wallets do this automatically.
Is it safe to store keys on an exchange?
Exchanges control your private keys, meaning you don’t have full asset control. For large amounts, self-custody with a hardware or software wallet is recommended.
Can I change my private key?
No, private keys are cryptographically generated and immutable. If compromised, you must transfer funds to a new wallet with a new key.
Ready to take control of your crypto? Download a secure wallet today and start managing your keys with confidence.