A little bit of technology: How do my bitcoins remain my bitcoins?

A little bit of technology: How do my bitcoins remain my bitcoins?

Access to your own bitcoins is governed by the private key. Private keys can be understood as passwords or online PINs for an account. Only those who know your private key can control your bitcoins.

However, a private key is much more complex than a password. It has the following format:

L12u6GYd3yLv4D6pGNrDKKwQmgeGCkrhhahRH8NycGTErBqeQWKv

From this private key, the so-called public key is generated, which can be considered as its Bitcoin address. This address is comparable to an IBAN: It can be freely shared. A public key looks something like this:

1BPT53cNDDQWDDoRoDy9Fmv6KGcNNM8XS2

Is there a possibility for someone to obtain the private key associated with this address? No, currently no known method exists for attackers to acquire it. The Bitcoin ecosystem employs established cryptographic methods to prevent this. Due to the close connection between the private key and the public key, it is often referred to as a key pair.

An extension of this system, which we will also learn about in this course, is called private seeds. It is a kind of "master password" typically consisting of 12-24 words. From this, a multitude of key pairs can be generated. The above example originated from such a sequence of words.

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The Bitcoin Seed Phrase: Better safe than sorry

The seed phrase is a random arrangement of 24 words. It allows you to always access your bitcoins. Remember: Write it down, store it securely, and don't tell anyone – be your own bank!

By the way, for those who want to know exactly, you can test it using Ian Coleman's Mnemonic Code Generators. However, it is recommended to limit its use to testing purposes only: for security reasons, the codes should not be used further.

The private keys or the seed are the ultimate access to the Bitcoin wallet. They must be kept secret at all times and should never be stored in readable form on a computer. As long as you have your private keys or seed, all the balances stored in the wallet can be restored.

Similarly, it is important not to lose the seed or the private key. Since Bitcoin is a decentralized system, there is no central authority that can help users regain access to their bitcoins.