Private & public keys and addresses

When you send or receive cryptocurrency, a private key authorizes transactions. The public key lets others verify their signatures, while an address identifies where funds should go on a specific network. Share an address to receive funds. Keep the private key and recovery phrase that provide access to your funds secret.

Address rules vary by blockchain. Bitcoin and Ethereum use different formats, and an address does not always correspond directly to a public key. Knowing the difference helps you send funds to the right destination and protect access to them.

How keys authorize and verify transactions

A private key is secret data its holder uses to create a digital signature attached to a transaction. The signature is cryptographic proof. The signature authorizes the transaction and lets others check that it was signed by someone with the matching private key. It does not hide the transaction.

The corresponding public key is mathematically linked to the private key. It can be shared so others can verify signatures or, in some cases, derive an address. In the cryptographic systems used by Bitcoin and Ethereum, ordinary methods do not provide a practical way to recover the private key from the public key.

You can remember the roles this way: the private key authorizes, the public key helps verify, and the address directs. Keep the private key secret. Share an address when someone needs to send you funds.

How addresses differ

An address is a network-specific identifier for a payment destination or spending condition. Its format depends on the network and the kind of destination it represents.

For an Ethereum account controlled by a private key, called an externally owned account, the address comes from the last 20 bytes of a hash of the public key. A hash is a fixed-length value calculated from data. It appears as 40 hexadecimal characters with a 0x prefix, for 42 characters total. Ethereum contract accounts also have 42-character addresses, but they have no private key. Code controls what those accounts do.

Bitcoin uses several address formats. Some encode a hash of a public key; others encode a hash of a script, which sets the rules for spending. Native SegWit addresses encode a witness version and program. Those differences are why “a Bitcoin address is a public-key hash” is too broad.

Before sending funds, check that the address belongs to the intended network and destination. A familiar-looking string does not establish that it is compatible with the network you are using.

How wallets manage keys and funds

A wallet is software or hardware that helps manage keys and interact with a blockchain. It is not the address itself. A wallet may generate many keys and addresses, and its interface may let you receive funds, sign transactions, or restore access.

The blockchain records the funds. In Bitcoin, spendable funds are tracked as unspent transaction outputs, or portions of past transactions that remain available to spend. In Ethereum, account balances are recorded on the network. A wallet uses keys to authorize transactions involving those records.

Some services hold customers’ keys, so access depends on the provider; self-custody wallets leave key control with the user. With self-custody, losing the keys and any usable recovery method can leave funds inaccessible.

How recovery phrases restore wallet keys

Many wallets use a recovery phrase to restore wallet keys. Under the BIP 39 standard, a wallet turns a recovery phrase, also called a mnemonic phrase, into a seed, a value used to generate a structured set of keys. The phrase does not represent a single private key. BIP 32 describes one common method for deriving those keys.

BIP 39 specifies phrases of 12, 15, 18, 21, or 24 words. A phrase generated under that standard does not guarantee that every wallet will restore the same accounts. Wallets can use different standards or settings that determine how they generate keys, so check compatibility before relying on a phrase to restore access elsewhere.

Treat a recovery phrase like a master secret. Anyone who obtains it can restore the keys it controls. Store it somewhere private and secure, and never enter it into a website or share it with someone claiming to provide support.

What public keys and addresses reveal

A regular public key is generally safe to share, but an extended public key from a hierarchical wallet reveals more information than a single public key. It can allow a wallet to generate related public addresses. In certain cases, combining a leaked extended public key with a private key derived from it can expose higher-level private keys. Share an extended public key only when you understand what it reveals.

An address is also not proof of someone’s identity. Activity on public blockchains can be visible and linkable, even when an address does not display a person’s name. Bitcoin.org recommends avoiding address reuse as a privacy measure. Use a fresh receiving address when your wallet offers one, and remember that transactions already recorded on a public blockchain remain visible.