What is a public key

TokenPocket introduces you to the BTC public key.

What is a Public Key?

A public key is a fundamental concept in cryptography and plays a critical role in the Bitcoin network. It is a long string of numbers and letters (typically 256 bits) derived from a private key using the Elliptic Curve Digital Signature Algorithm (ECDSA, specifically the secp256k1 curve). In simple terms:

• Definition: A public key is a cryptographic value that can be shared openly, used to receive Bitcoin or verify transaction signatures.

• Relation to Private Key: The private key is your "secret key" for signing transactions to prove ownership of funds, while the public key is the "public key" derived from it, allowing others to verify your signature.

• Generation Process: The derivation from private key to public key is a one-way process (irreversible), ensuring security.

Public Key and Bitcoin Address Relationship

In Bitcoin, the public key itself is not directly used as a receiving address; rather, it undergoes further processing to create the actual address. The specific address type (e.g., P2PKH, P2SH, SegWit, Taproot, as discussed earlier) determines how the public key is transformed and utilized:

1. P2PKH (Legacy Address)

   • The public key is hashed (first with SHA-256, then RIPEMD-160) to produce a shorter public key hash.

   • A version byte and checksum are added, and the result is encoded into an address starting with "1."

   • Example: Public Key → Hash → 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.

2. P2SH (Script Address)

   • The public key can be part of a script (e.g., a multi-signature script), which is hashed to create a script hash, then encoded into an address starting with "3."

   • The public key itself is not directly visible in the address but is embedded in the script logic.

3. SegWit (Segregated Witness Address)

   • The public key remains foundational, but SegWit optimizes signature data storage. The public key hash or script hash is encoded using Bech32, resulting in an address starting with "bc1q."

   • The public key is provided as part of the "witness data" in transactions.

4. Taproot (P2TR Address)

   • The public key is processed with Schnorr signature technology to produce a Taproot output, encoded as an address starting with "bc1p."

   • Here, the public key supports complex conditional scripts while enhancing privacy.

Functions of a Public Key

• Receiving Bitcoin: You share your address (derived from the public key) with others, enabling them to send you BTC.

• Transaction Verification: When spending Bitcoin, the public key is used to verify the private key signature, ensuring the transaction’s legitimacy.

• Security: The public key can be shared publicly because deriving the private key from it is computationally infeasible (thanks to the mathematical complexity of elliptic curve cryptography).

Simple Analogy

Think of the public key as a "mailbox number" and the private key as the "mailbox key." You give others the mailbox number (address) so they can send you letters (BTC), but only you can open the mailbox with the key (private key). The public key is like the "technical blueprint" for the mailbox number, used to generate the address and verify the mailing process.

Practical Example

• A private key might be: 5J3mBbAH58CpQ3Y5RNJpUKPE62SQ5tfcvU2JpbnkeyhfsYB1Jcn

• The derived public key could be: 04x1... (a long hexadecimal string)

• The final address might be: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa (P2PKH type).