There are a lot of misconceptions regarding the differences between cryptocurrency keys, addresses, and wallets. To provide more clarity on this topic, let’s look at their characteristics one by one.
Keys
There are two types of keys: public keys and private keys. Public keys are comparable to account numbers. They can be freely shared with everyone, and anyone can potentially send transactions to them.
A private key is simply a number, picked at random. Ownership and control over the private key allows control over all funds associated with the corresponding bitcoin address. The private key is used to create signatures that are required to spend cryptocurrencies by proving ownership of funds used in a transaction and must remain secret at all times. Revealing it to third parties is equivalent to giving them control over the bitcoin secured by that key. The private key should also be backed up and protected from accidental loss, because if it’s lost all of the funds secured by it are forever lost, too. You should NEVER, under any circumstances, share your private key(s) with any other person. It’s best to store them in the most secure way possible (e.g. on a paper wallet or a hardware wallet).
Wallet Addresses
A wallet address is a randomly generated set of numbers and letters which represent a unique location on a blockchain similar to a bank account number at a bank. Here is an example of a wallet address: the first Bitcoin address ever: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa. (Do not send funds to this address)
Wallet addresses can be created by anyone, for free, without needing a third party. You can create as many public addresses as you like or need. Wallet addresses are public and can be safely shared. Anyone with this address can send cryptocurrencies to the wallet associated with it. Think of an address as a bank account number.
Key Points to Remember:
A private key is a string of random numbers that is generated using wallet software
From the private key, we use a cryptographic function to generate the public key
From the public key, we use a hash function to generate the address
There can be multiple private keys, public keys, and addresses generated from the master private key