When engaging in Non-Fungible Tokens (NFTs), terms such as public keys and private keys come to light. Private keys are essential to the blockchain ecosystem since they act as passwords to digital wallets. Understanding the security of NFTs includes knowing the use of cryptography, which includes private and public keys. This article dives deeper into explaining private keys and their purpose in the blockchain network.
What are Private Keys?
In order to create, own or store an NFT, you need a digital (crypto) wallet. These wallets are also used in trading digital assets, including Bitcoin and Ethereum, as well as digital art. Private keys provide the cryptography in Non-Fungible Tokens. Cryptography refers to the technique employed in protecting the privacy of a message by encrypting it in a form that the intended recipient can only understand.
Usually, private keys are numerical codes encoded in a more user-friendly manner to make them easier to remember. Most wallets use the ‘secret recovery phase’, also known as the ‘seed phase’, to unlock crypto wallets. When opening a crypto wallet, you are assigned a string of words that you use to unlock your wallet funds. The private key is embedded in this string of words.
The NFTs owned or created are encrypted and can only be unlocked using the wallet’s associated private keys. Private and public keys are fundamental elements that create unique digital signatures used in blockchain technology. Using them assures that your transactions remain anonymous, secure, and authentic while keeping your records immutable.
The Role of Private Keys
Ownership of NFTs is managed using private keys. They are basically sentinels to all digital assets in a particular crypto wallet, including digital art. The private key gives anyone holding it access to the NFTs therein and can move or exchange the digital asset. In essence, a Non-Fungible Token is a non-duplicable certificate that shows ownership of a digital asset.
As public keys transform messages into an unintelligible sequence of characters, the private key is used to bring them back to their original form.
The private keys act as an authentication mechanism that prevents security breaches or compromises. It prevents theft of digital assets as well as guarantees possible account recovery by the rightful account owner. Based on its role of granting complete access to your digital wallet, it is imperative to keep your private key secure.
Also, in case you need to leave a next-of-kin who will take over your assets in the digital wallet, the private key comes in handy. Giving your family access to your private keys assists in the death-management process.
Are there Risks in Coupling Private Keys?
Similar to other blockchain platforms, the NFT marketplace is a target for hackers based on the highly valued pricing of digital assets. Cybercrimes, including phishing, ransomware, supply chain attacks, and even insider threats, are all part of the possible scenarios that could befall your digital wallet. However, this is only possible if your private key is compromised or stolen. In such cases, it could lead to an ATO; an account takeover.
Moreover, enabling private keys to stand as gatekeepers creates concentrated risk in one particular area. As such, it could lead to a possible failure scenario if the hackers use sophisticated slow-rate attacks to breach your wallet.