If it is a currency, you need a wallet to store it! Either it is fiat or digital currency, the wallet is supposed to be there with you to keep your coins safe. Unlike the conventional currency, Bitcoin is saved either in an online or offline crypto wallet. Some of you might be wondering, if the Bitcoin is recorded on the blockchain network or distributed ledger, when what actually do you need to store or protect your Bitcoins. In crypto space, you need to store the digital codes known as private keys in your Bitcoin wallet and thereby to utilize your Bitcoins. Private keys are not just the passwords but it determines the ownership of coins. In this article, let us unlock the meaning of the private key of your Bitcoin wallet. Also, we will explain the procedure to recover the bitcoin wallet with private key (in case you lost the keys!)
Private Key Of Your Bitcoin Wallet | Quick Review
In crypto space, you own and manage your currency, unlike the conventional fiat currency where central institutions manage your money. Private keys are the series of digital codes that let you own and manage your Bitcoins by giving you access to your crypto wallet while proceeding the transaction. Technically, the private key is a sophisticated cryptographic form (to prevent a key from hacking) which looks like a series of digital codes or symbols (letters and numbers). These private keys are stored in the Bitcoin wallet. When you got your wallet (hot/cold) for the first time, you must have received public addresses and private keys to manage funds in the wallet.
How To Use Bitcoin Private Key?
You seem to be a little confused! Technically, you might have an idea about a private key but practically you could not find out- How to use Bitcoin private key? Let us try to explain the procedure in simpler words.
Make it clear in your mind that a crypto wallet stores private keys. When a transaction is initiated from the other side or sender starts the transaction process, your crypto wallet (used for the purpose of the transaction) creates a special digital signature by processing mathematical transactions with the use of correct private keys( cryptographically secured) The digital signature created cannot be reused and is unique for each transaction. So, now you have a digital signature and public key (like email address) to authenticate a message or transaction(produced using a private key of the sender matched with the published public address of receiver), thereby completing the procedure. Thus, any crypto transaction is digitally signed with the help of matched private keys.
As these private keys are essential to define your ownership of Bitcoins, you need to protect them from malicious attacks if stored in online wallets and safeguard from getting lost if stored in offline or hardware wallets. But have you ever thought, if your keys are lost, then how to find your bitcoin private key? Let us move on to the next section to know the retrieval process.
How To Recover Bitcoin Wallet With Private Key? | Retrieving Private Keys
Oops!! What will happen now? Shit! I have lost my private keys and may have lost the huge investments I had made in cryptocurrency! How to recover Bitcoin wallet with private keys These types of thoughts might already hit you or may bang your head in the future if you are not careful while storing your private keys! Precaution is always better than cure but sometimes accidents happen!
A few years back, it was impossible to find your lost keys but you should be thankful for the innovative technologies which can help you to recover private keys. So let us suppose you get your brand new wallet with private keys and public addresses. The first thing you must have done is to create the backup of private keys with the help of a recovery phrase or seed phrase made by the combinations of 20-25 words( Don’t forget to write that phrase somewhere, where you can find them easily but not others). Now, let us consider you are unable to access your private keys or lost them. You need not worry and just have to enter your recovery phrase in the replaced crypto wallet or a newer version of the wallet to retrieve your funds and get the old private keys. Your balance will restore and coins will appear again in your new version of wallet. Thus, your funds are recovered but all of the previous devices connected to your previous wallets are still existent which might cause you trouble. Keep calm, we are here to solve that problem also as we are going to explain to you about importing the private keys.
How To Import Your Private Keys?
If you had lost your private keys, with the help recovery phrase you must have transferred the funds to a newer version of your wallet (with your private keys). But what happened to the last version in case of lost phone, hardware wallet or even paper wallet? Your lost wallet may cause you trouble if discovered by a third party. So, to prevent any worst-case scenario, you can sweep or import your private key to a whole new public address or new crypto wallet which provides you with newly generated private and public keys. Some of the non-custodial wallets like Ledger, Trezor, Exodus, and many more can facilitate you to sweep your older wallet and transfer it into a new one. Thus, in case of losing your keys, you not only need a new version of wallet but a brand new crypto wallet where blockchain import private key into a new wallet and keeping your funds safe.
The private key of your Bitcoin wallet can be retrieved by your recovery phrase but we will recommend you to be extra cautious with the private keys to access your funds. You must spend a little more time and research a few more options while selecting the crypto wallet to store your private keys. It is being advised to choose from hardware/offline/cold wallet like Trezor, Ledger Nano rather than software/online/hot wallet (vulnerable to online attacks). So, we wish you happy and safe trading and suggest you protect your private keys as much as you can.!