What is a Public Key - The Safe Half of Crypto's Key Pair

If your private key is the ultimate secret that controls your cryptocurrency, how do people send you crypto without you having to give them this dangerous secret? The answer is one of the most elegant solutions in modern cryptography: the public key.

Here's the quick version: a public key is a cryptographic key mathematically derived from your private key. It can be shared publicly without risk, and it allows others to send you cryptocurrency and verify that transactions actually came from you—all without ever revealing your private key.

It's cryptographic magic that makes trustless digital transactions possible. You prove ownership without revealing the secret. You receive money without exposing yourself to theft.

The Two-Key System: Public and Private

Cryptocurrency uses public-key cryptography, also known as asymmetric cryptography. You have two different keys that work together but aren't interchangeable.

Your private key is the master secret—never share this. It proves ownership and authorizes spending. Your public key is derived from the private key and safe to share. It's used to receive funds and verify signatures.

Think of it like a mailbox. Your private key is the mailbox key that only you have—it lets you retrieve mail and proves you own the mailbox. Your public key is the mailbox address—anyone can use it to send you mail, but knowing the address doesn't let them open your mailbox.

The brilliant part? These two keys are mathematically linked through one-way functions. You can always derive the public key from the private key, but you can't reverse-engineer the private key from the public key. It's computationally impossible, even with all the computing power on Earth running for thousands of years.

How Public Keys Are Generated

When you create a new cryptocurrency wallet, the wallet generates a random private key—a 256-bit number. That's more than the number of atoms in the observable universe.

Then the wallet takes your private key and runs it through an elliptic curve cryptographic function. Bitcoin and Ethereum both use this approach. This is a one-way mathematical operation based on properties of curves in mathematics. The result is your public key.

This public key is long and unwieldy—about 130 hexadecimal characters. Not exactly user-friendly. So most cryptocurrencies create an address—a shortened, checksum-validated version of the public key that's easier to work with and harder to mistype.

For Ethereum, the process involves hashing the public key using Keccak-256, taking the last 40 characters, and adding "0x" as a prefix. You get something like 0x742d35Cc6634C0532925a3b844F9e764E03830c0.

For Bitcoin, they hash using SHA-256 then RIPEMD-160, add a version byte and checksum, and encode in Base58. You get addresses like 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa—that's actually Satoshi Nakamoto's original Bitcoin address from the genesis block.

The address is what you actually share. It's derived from the public key, which is derived from the private key. This entire chain of derivation is one-way—you can't work backwards.

What Can You Do With a Public Key?

Public keys enable two critical functions: receiving funds and verifying digital signatures.

When someone wants to send you crypto, they need to know where to send it. That's what your public key provides, usually in its shortened form as your address. They create a transaction that says "send X amount to address Y," broadcast it to the network, and miners verify it. Now your address controls that crypto. The sender never needed your private key.

The second function is verifying digital signatures. When you send cryptocurrency, you create a transaction and sign it with your private key. This signature proves three things: you authorized this specific transaction, the transaction hasn't been tampered with, and you control the private key associated with the address.

Anyone can use your public key to verify this signature is authentic. They don't need your private key—just the mathematical verification function using your public key, the signature, and the transaction data. If it checks out, the signature is valid. If not, the transaction gets rejected.

This is how the network prevents fraud without needing a trusted authority. Everyone can independently verify transactions are legitimate using publicly available information.

The Mathematical Magic: One-Way Functions

Public-key cryptography relies on asymmetric mathematical operations—things that are easy to compute in one direction but nearly impossible to reverse.

Think of breaking a plate. Easy to smash it into pieces. Impossible to reassemble it perfectly. Or mixing paint—easy to mix yellow and blue to get green, impossible to separate green paint back into pure yellow and blue.

In cryptography, we use elliptic curve discrete logarithm problems. You start with a point on an elliptic curve, multiply it by your private key (just a number), and the result is your public key (another point on the curve).

Going from private key to public key? Easy—takes milliseconds. Going from public key back to private key? You'd have to try all possible private keys. That's 2^256 possibilities. With current computing power, this would take longer than the age of the universe.

This asymmetry is what makes public-key cryptography secure. You can publish your public key to the world, and nobody can figure out your private key. The mathematics guarantee this.

Public Key vs. Address: What's the Difference?

People often use "public key" and "address" interchangeably, but technically they're different. Your public key is the actual cryptographic key derived directly from your private key—a long string used for signature verification. Your address is a shortened, checksum-validated hash of your public key used for receiving funds.

In most day-to-day crypto use, you work with addresses, not raw public keys. But the address is mathematically derived from the public key, so they're intrinsically linked. When you make a transaction, your wallet includes your public key or a signature from which the public key can be recovered. The network verifies the public key matches the address and the signature is valid.

Multiple Public Keys and Privacy

Best practice is to use multiple addresses for privacy. From a single seed phrase, modern wallets can derive essentially unlimited public keys using HD wallets (Hierarchical Deterministic wallets). Your seed phrase generates a master private key, then derives child keys deterministically. Same seed phrase, same sequence of keys. You backup one seed phrase but generate thousands of addresses.

Here's the privacy issue: crypto is pseudonymous, not anonymous. Transactions are public, but identities aren't directly revealed. Your public key is like a username—anyone can see all transactions associated with it. If someone connects your real identity to your address through an exchange, social media, or blockchain analysis, they can see your entire financial history.

This is why privacy-conscious users use a new address for each transaction and don't publicly link addresses to their identity.

Why Public Keys Enable Trustless Transactions

Traditional finance requires trusting banks to verify accounts and update balances. Crypto replaces that trust with math. You create a transaction, sign it with your private key, and broadcast it. Thousands of nodes verify your signature, check your funds, and validate consensus rules. No bank, no authority—just distributed consensus. Public-key cryptography lets you prove authorization without revealing your private key.

The Bottom Line

A public key is your shareable cryptographic identity in the cryptocurrency world. It's mathematically derived from your private key using one-way functions that make reversal computationally impossible. You can share it freely—people use it to send you cryptocurrency and verify your signatures.

This asymmetric relationship—one key public and safe, one key private and powerful—is what makes trustless digital money possible. You can receive funds from strangers without risk. You can prove ownership without revealing secrets. You can transact without intermediaries.

The mathematics guarantee your security as long as you protect your private key. The public key can be as public as you want—share it on Twitter, print it on business cards, put it on your website. Just keep that private key private.

References

1. Cloudflare - "How Does Public Key Encryption Work?" - https://www.cloudflare.com/learning/ssl/how-does-public-key-encryption-work/
2. Bitcoin Wiki - "Address" - https://en.bitcoin.it/wiki/Address
3. Ethereum Documentation - "Accounts" - https://ethereum.org/en/developers/docs/accounts/
4. Cloudflare - "Elliptic Curve Cryptography" - https://blog.cloudflare.com/a-relatively-easy-to-understand-primer-on-elliptic-curve-cryptography/
5. BIP32 - "Hierarchical Deterministic Wallets" - https://github.com/bitcoin/bips/blob/master/bip-0032.mediawiki
6. Bitcoin Developer Guide - "Public Key Formats" - https://developer.bitcoin.org/devguide/wallets.html
7. IBM - "Asymmetric Cryptography" - https://www.ibm.com/docs/en/ztpf/1.1.0.15?topic=concepts-asymmetric-cryptography
8. Forbes - "Quantum Computing and Crypto" - https://www.forbes.com/sites/rogerhuang/2020/12/21/quantum-computing-cryptocurrencies/
9. Binance Academy - "Blockchain Privacy" - https://academy.binance.com/en/articles/why-privacy-matters-in-cryptocurrency
10. Investopedia - "Public Key" - https://www.investopedia.com/terms/p/public-key.asp