Crypto Wallet Security: Private and Public Keys

MetaMask sent ripples through the cryptocurrency world when it sent a warning out to users about potential vulnerabilities with some of the older crypto wallets offered by the company. They were quick to note that a series of conditions must be met for a user’s wallet to potentially be compromised:

For users of the MetaMask extension before version 10.11.3, three necessary conditions would have led to the potential vulnerability.: 1) an unencrypted hard drive; 2) having imported a secret recovery phrase into a MetaMask extension on a device that was compromised, stolen, or has unauthorized access; and 3) having used the “Show Secret Recovery Phrase” checkbox to view one’s secret recovery phrase on-screen during the import process.

It is unlikely for the average user to have all three of these conditions met, but the company was swift to put out its findings regardless. In fact, they had partnered with an outside security firm known as Halborn to uncover these findings. The firm was awarded $50,000 for its efforts. What this should tell you is that many companies are taking the security of protecting crypto wallets extremely seriously.

The value of various cryptocurrencies is so high that nothing but the best security is acceptable. The MetaMask tale should leave any crypto wallet holder asking themselves what more they can do to protect their valuable cryptocurrencies. It all starts by understanding the difference between public and private keys and how to use each one safely.

Public Keys

A public key is very much what it sounds like. It is a key that can be viewed by anyone in the public. The key is linked to your crypto wallet and is used to send or receive transactions. However, you might think of this key as being somewhat similar to your bank account number. That is to say that it is directly tied to your account, but the number alone is not enough to get into your account and compromise its security.

Private Keys

Your private key is confidential and must be protected from everyone else. It is the key that can truly do some damage to your account if it gets into the wrong hands. You should think of a private key as the same as your bank account password. If someone has access to it, they have access to your account and the funds contained within. You must treat your private key with the level of respect and security that it deserves. That is to say that you cannot mess around with your private key and expect your account to remain safe. This is the key that you must keep completely locked down at all times.

How to Keep Private Keys Protected

There is a thriving industry of people who spend all of their time just trying to hack into crypto wallets. They managed to steal nearly $4 billion worth of cryptocurrencies across 122 different thefts in 2020 alone. Thus, the protection of your private key is one of the most important things that you can focus on at this time. If you keep your private key protected, then you can rest a lot easier knowing that you have done everything in your power to keep your wallet safe. To do so, you need to understand the two types of wallets out there: hot wallets and cold wallets.

Hot Wallets

This type of wallet is generally harder to keep completely secure because it has a connection to the Internet. Once the user generates a hot wallet, they will automatically receive both a public key and a private key to that wallet. This is exactly the kind of system that exists on a platform like Coinbase. The advantage to users of a wallet like this is that it is user-friendly and easier to move money around in. The downside is that the direct connection to the Internet makes it a bit less secure.

Cold Wallets

Increasingly popular with many crypto enthusiasts are cold wallets. This is because they have no direct connection to the Internet. They are typically stored in a physical form such as on a USB drive, and the owner of this type of wallet can keep their private key safe by doing something as simple as writing it down on a piece of paper.

A nice feature of these wallets is the fact that they have a safe way to recover the private key in the event that the physical device the wallet is contained on is ever stolen. 24 English words are generated in a specific order (this should be written down). If entered correctly and in the correct order, this can produce a user’s private key for them again so they can recoup what was stolen from them when someone took their physical crypto wallet. Best of all, the thief won’t have access to the crypto contained within the wallet without the private key to get into it.

Protecting your private key generally comes down to having it written down somewhere and also writing down the 24-word backup recovery phrases in order to have a failsafe in case your wallet is ever stolen. You need to keep both of these incredibly important keys locked away where only you know where they are. As long as you do this, your private key should be secure.

What Wallet to Choose?

The right wallet to use will differ from person to person. Those who intend only to purchase a small amount of cryptocurrency for making online purchases are likely best served by a hot wallet that is easier to use and access as needed. They only intend to use crypto for a limited consumer purpose, and their risk of having their wallet compromised is minimal.

However, someone who intends to purchase cryptocurrencies for investment purposes and/or intends to hold a significant amount of cryptocurrency should probably go the cold wallet route. Those individuals are certainly more concerned with security than almost anything else, and a cold wallet gives them a little extra safety in their transactions. Regardless, every crypto wallet holder should keep security top of mind when they transact in any virtual currency.

One top option for those who want a wallet that is both easy to use and keeps their money secure is the wallet from Blockbank. This choice is excellent for all because it has a huge number of currencies that one can trade easily from their phone. There is no middleman standing between buyers and the currencies that they wish to purchase. Security has always been a top priority with Blockbank, and wallet holders can sleep easy knowing that their funds are safe and secure with this particular wallet.

Key Takeaways

Private keys must always be kept confidential as they provide access to the stored funds in wallets. Public Keys are used for transactional purposes. Both cold and hard wallets have their pros and cons. A hot wallet is more mobile and easy to access, whereas a cold wallet brings an extra layer of security. Cold wallets are becoming increasingly popular among crypto enthusiasts. What wallet is right for you, depends on your needs. Blockbank provides a default hot wallet; as well as that users have a chance to store their currencies in their cold wallets as well.

Whether a hot or cold wallet is used, one must always remember the risks that come with cryptocurrencies. Please invest only after taking risks and unregulated aspects of cryptocurrencies into account. Blockbank values the investments of its users and wants them to practice safe investing.