Blockchains acts as a public, distributed ledgers. The benefit of a blockchain is that everyone can check the ledger, preventing fraud. Every time a transaction occurs, it is broadcasted around the world to every computer in the network. What we haven’t yet discussed is how to actually initiate a transaction.
There’s a bit more crypto-vocabulary to learn first (we know, there’s enough fancy mumbo jumbo to make a whole new dictionary [oops] out of it):
Think of your public address like your email address: anyone can send you an email if they have your address–it’s public. To receive cryptocurrency, all you have to do is give the sender your public address. The address is a long, random string of numbers and letters.
On the other hand, if you want to send an email to someone else, you must first enter your password and log into your email account. The password ensures that it’s actually you sending emails, instead of some hacker or your friends trying to prank you.
In the same way, to send your crypto to someone else you must first enter your private key. A private key is what protects your account, so it should never be shared with anyone else.
Entering your private key to validate, or “sign”, a transaction is like saying “Yep! This is me! Go ahead and send a bitcoin to Joe.”
Two things to note:
To recap: accounts have two parts, a public address and a private key. Keeping your private key safe is of paramount importance. Don’t worry, we cover how to do just that in the next section.