Crypto Foundations · Using Your Own Crypto
Wallets, Public Keys and Private Keys
What You'll Learn
- What a crypto wallet actually stores
- The difference between a public key and a private key
- Why "controlling your keys" is treated as equivalent to controlling your funds
The Big Idea
I want you to imagine opening a crypto wallet app for the very first time. Here is the most important thing to understand: a crypto wallet does not store your coins the way a physical wallet stores cash. Instead, it stores the keys that prove you have the right to move funds recorded on the network.
You buy crypto on an exchange, move it into a wallet you control, and the wallet's keys let you sign transactions on the blockchain itself.
Let's Break It Down
Every wallet is built around a matched pair of keys: a private key and a public key. The private key is a secret number. The public key is mathematically derived from that secret number.
Here is an important detail: it is easy to calculate the public key from the private key. But it is essentially impossible to reverse that process — you cannot work out the private key from the public one.
Your public key (or an address derived from it, which I will explain in the next lesson) is safe to share with others. It is simply how they know where to send funds to you. Your private key is different — it is what actually authorizes spending.
Let me be very direct about this: whoever holds the private key for a given balance can move it. The network does not check who "you" are. It only checks whether a transaction is correctly signed by the matching private key.
This is exactly why people in crypto often repeat the saying, "not your keys, not your coins." If a wallet app or an exchange holds the private keys on your behalf, they are the ones technically able to move the funds — you are trusting them to act on your instructions. Holding your own private keys means that authority sits with you alone, with nobody else able to move those funds without them.
Real Example
Here is a picture that helps most people. Think of the public key as a mail slot on a locked mailbox — anyone walking by can drop mail into it. Think of the private key as the only key that opens that mailbox to take mail back out. Anyone can know where the mailbox is and post something to it. But only whoever holds the physical key can open it and remove what is inside.
Why It Matters
I want you to sit with this idea, because every deposit, every withdrawal, and every transfer of crypto ultimately comes down to this one key pair. Understanding it now will make the next two lessons — addresses, and the seed phrases that back up your keys — click into place much faster. This is, in my view, the single most important mental model for handling crypto responsibly.
Common Mistake
Many beginners confuse the public key with something that needs to be kept secret. I want to correct that clearly: the public key is meant to be shared freely. It is the private key, and only the private key, that must never be shared with anyone, for any reason.
Quick Check
What actually authorizes spending funds on a crypto network?
Key Takeaways
- A wallet stores keys, not coins — the coins' record lives on the network itself.
- The public key can be shared safely; the private key must never be shared.
- Whoever holds the private key can move the funds — this is the basis of the phrase "not your keys, not your coins."
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