Private key

By the Blockhorizon Editorial Team · Updated 2 October 2026 · How we check facts

What does a private key do?

Crypto ownership is recorded on a blockchain, and every transfer on it is cryptographically signed. The private key is what produces that signature. When your wallet sends coins, it uses the key to prove the instruction really came from the owner of the address.

NIST, the US National Institute of Standards and Technology, describes a wallet as software or hardware that can store private keys, public keys and associated addresses. So the key is the thing of value. The wallet is just its container.

How is a private key different from a public key or an address?

Think of the address as an account number and the private key as the only pen that can sign cheques on that account.

What happens if someone else gets your private key?

A simple example: you save a photo of your key, and the photo syncs to a cloud account that is later breached. The attacker now has the same power you do. NIST notes that a thief with the private key has full access to the assets it controls, and that once stolen funds are transferred, the transaction generally cannot be undone. There is no bank to call and no chargeback.

What are the most common private key mistakes?

• Keeping a single copy. NIST explains it is computationally infeasible to regenerate the same key, so one lost copy can be the end.
• Storing it as plain text or a screenshot on an internet-connected device or cloud service.
• Expecting a reset. The SEC is clear that a private key cannot be changed or replaced, unlike a password.
• Handing it to a helper. Anyone asking for your key, even someone claiming to be support staff, is a classic warning sign. See our crypto scam red flags.

EU supervisors describe losing private keys as a permanent and irreversible loss of access.