How to Generate Public and Private Keys for Blockchain

Public-key cryptography, also known as asymmetric cryptography, is an encryption system that uses a pair of public and private keys. It is one of the most critical components in cryptocurrency protocols, serving multiple purposes:

• Wallet Creation: Ensures cryptocurrencies can only be accessed by the owner.
• Transaction Signing (Digital Signatures): A core feature of cryptocurrency protocols.

In short, when you send cryptocurrencies to someone, the transaction is signed using your private key (or a signature key derived from it) and verified using your public key. If a hacker obtains your private key, they can transfer your funds to themselves.

Key Generation Algorithms

Two primary algorithms are used to generate cryptographic keys:

1. Elliptic Curve Digital Signature Algorithm (ECDSA): Used by Bitcoin and most modern cryptocurrencies.
2. Rivest–Shamir–Adleman (RSA): An older but widely adopted public-key cryptosystem.

This article focuses on RSA, its workflow, and how it compares to ECDSA.

RSA Algorithm Explained

RSA relies heavily on modular arithmetic (mod n). Key components include:

1. Key Pair Generation
2. Data Encryption with Public Key
3. Data Decryption with Private Key

Step 1: Generating Public and Private Keys

To generate RSA keys:

1. Choose two large prime numbers, p and q.

2. Compute:

   • n = pq
   • z = (p-1)(q-1)

3. Select e (encryption exponent) such that:

   • e and z are coprime (gcd(e, z) = 1).

4. Find d (decryption exponent) where:

   • ed ≡ 1 mod z.
5. The public key is (n, e), while the private key is (n, d).

Step 2: Encrypting Data

To encrypt message m (where m < n):

• Compute ciphertext: c = m^e mod n.

Step 3: Decrypting Data

To decrypt ciphertext c:

• Compute original message: m = c^d mod n.

RSA vs. ECDSA: Key Differences

| Feature | RSA | ECDSA |
|-----------------|-----------------------------|--------------------------------|
| Key Size | Large (2048+ bits) | Compact (256 bits) |
| Speed | Slower | Faster |
| Memory Use | High | Low |
| Security | Relies on factorization | Relies on elliptic curves |

Why Cryptocurrencies Prefer ECDSA:

1. Efficiency: Smaller keys and faster computations.
2. Scalability: Better suited for blockchain networks.

👉 Explore blockchain security tools for advanced key management.

FAQs

Q1: Can RSA keys be used for cryptocurrencies?
A: While possible, most blockchains (like Bitcoin) use ECDSA for efficiency.

Q2: What happens if I lose my private key?
A: Funds become irrecoverable—always back up keys securely.

Q3: Is RSA obsolete?
A: No, but ECDSA dominates in blockchain due to performance advantages.

Q4: How are RSA keys stored?
A: Typically in PEM files or hardware security modules (HSMs).

🚀 Pro Tip: Use OpenSSL or tested libraries for secure key generation.

Conclusion

While RSA laid the foundation for public-key cryptography, ECDSA is the preferred choice for blockchain due to its compact keys and faster operations. Understanding both algorithms helps in evaluating security trade-offs.

👉 Learn more about crypto key management to safeguard your assets.