Learning Bitcoin Part -2

In the first part - Learning Bitcoin Part -1 - Explained - DLT Labs Forum, we learned about who created Bitcoin, high-level technology amalgamation and motivation for it.

In this part, we will dive deeper into the technical aspects of Bitcoin related to keys, Addresses and Wallets.

In Bitcoin, public and private key pairs are used to secure and manage transactions. The public key is a unique string of characters representing a destination for a Bitcoin payment and is used to create a Bitcoin address. On the other hand, the private key is a secret code used to access and manage the funds associated with a specific address or account.

A Bitcoin address is created by taking a hash of a public key. This address can be shared publicly, and anyone can send Bitcoin to it. When a payment is received at a specific address, it can only be accessed and managed by the person who holds the corresponding private key. The private key is used to sign transactions and provide proof of ownership for the addresses in the account.

On the other hand, an account refers to a collection of addresses controlled by a single private key. An account can have multiple addresses, and all addresses in an account can be linked to a single private key.

It’s important to note that the private key must be kept safe and secure, as anyone who has access to it can access and manage the funds associated with the corresponding addresses. Some people choose to store their private keys offline in a “cold storage” solution, such as a hardware wallet, to protect them from potential hacking or theft.

In summary, Bitcoin addresses are created using public keys and are used to send and receive payments on the Bitcoin network. Accounts are a collection of addresses that are controlled by a single private key, and private keys are used to access and manage the funds associated with these addresses. It’s important to keep private keys safe and secure to protect your funds.