Bitcoin private keys, public keys, addresses and wallets explained for total beginners in very simple terms

Private Key:

The private key is like a secret code that lets you use your Bitcoin. It's super long and practically impossible to guess. Imagine picking a tiny grain of sand on a massive beach, and then asking someone to find that exact grain among all the beaches on Earth – that's how hard it is to guess a private key.

Your private key should be kept super safe. Never show it to anyone, don't put it online, and always have a backup that's not on a computer. If you lose your private key, you lose your Bitcoin forever.

An example of a Bitcoin private key can be seen below. It contains 64 characters:

a966eb6058f8ec9f47074a2faadd3dab42e2c60ed05bc34d39d6c0e1d32b8bdf

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Essentially, creating a bitcoin private key is the same as picking a random number between 1 and 2^256 (2 multiplied by itself for 256 times). To give you a sense of scale, 2^256 results in a number that has 78 digits, and on your calculator 2^256 should look something like:115,792,089,237,316,195,423,570,985,008,687,907,853,269,984,665,640,564,039,457,584,007,913,129,639,936

Or, for a more readable one:1.158 x 10^77(that’s 1.1 with 77 zeros behind)

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Public Key and Bitcoin Address:

Public keys are like codes derived from private keys that help generate Bitcoin addresses. These addresses are similar to your computer's IP address, allowing you to send and receive Bitcoin on the internet.

Bitcoin addresses look something like the following:

12rBqcTDCai3MHE3HMie4whkf9X8odffkH

Bitcoin addresses are like your mailing addresses on the web. They start with 1, 3, or bc1, followed by random characters. Each type has some differences:

1.Addresses that start with 1 (P2PKH) are the original format for Bitcoin. They work fine but might have higher fees and aren't as efficient.

2.Addresses starting with 3 (P2SH) allow for more complex functions, like requiring multiple signatures for a transaction. They can be used with both SegWit and non-SegWit addresses.

3.Addresses starting with 'bc1' (Bech32) are native SegWit addresses and are more efficient, leading to lower fees. They are a bit longer and might not be accepted everywhere yet.

You usually don't need to worry about public keys unless you're doing technical stuff with Bitcoin. Your wallet software takes care of most things for you.

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Wallets:

Bitcoin wallets come in two main flavors: hot and cold. Within these categories, you have various types like mobile, desktop, hardware, and paper wallets. But what are these wallets exactly?

Think of a Bitcoin wallet as your personal bank account for your bitcoins. It's a place where you can send and receive them. There are two big categories of wallets: custodial and non-custodial.

Custodial Wallets: These are like traditional bank accounts. You don't control the private keys; someone else does on your behalf. But remember, just like a bank, they can freeze or take your funds.

Non-Custodial Wallets: These are wallets where you're in full control. You're like your own bank. It's awesome, but it means you must be super careful because if you lose your keys, you lose your money.

There's no one-size-fits-all wallet. You need to pick one that suits you and keep it safe. It's a good idea to spread your funds across a few wallets, just to be extra secure.

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In my next post I will be going thorugh a lot of wallets and describe each one of them.

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TL;DR:

1.Your private key is an ultra-secret code for your Bitcoin. Keep it safe, don't share it, and always have a backup. Losing it means losing your Bitcoin.

2.Public keys help create Bitcoin addresses, like your online mailing address. They start with 1, 3, or bc1, with some differences.

3.Bitcoin wallets are hot (like bank accounts) or cold (you're your own bank).

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This info was put togheter by me in a simplified way for you guys with the help of the How to Bitcoin book from Coingecko. Hope it helped!