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To keep your crypto funds safe and secure private keys are vital sources. These keys may be a combination of particular letters or digits and act like passwords or PINs to protect your funds properly. Coinbase is one of the frequently used and reliable platforms to trade in different cryptocurrencies. It offers you a facility to generate your private key. However, many people don’t know how to use this forum to create a key. So, they get confused on the point “how to generate a private key from coinbase for bitcoin?”
To generate a new and reliable private key from Coinbase for your bitcoin wallet, you should know certain facts that are crucial to learning before moving on. In the later section, you’ll encounter all the important facts about private keys that are necessary to understand to protect your wallet. So, let’s move on without waiting a while to explore all about private keys.
Difference between Public and Private Key
If you are trading in bitcoin or other cryptocurrencies, you will surely know that you are given two keys whenever you buy any cryptocurrency. One of them is commonly used to share or transfer the funds from your wallet to other wallets; this key is called a public key. The other key is not public and is just known to you. So, the key protects your account, and your funds are safe until this key is safe.
The private key is unknown to all people, and you can manage your account according to your own will. No one can disturb your wallet until he/she gets access to your account through a private key. So, you can trade in BTC or other cryptocurrencies anywhere.
How to Generate Private Key in Coinbase?
Here is a simple procedure to create a private key for your bitcoin wallet by using Coinbase.
- Log in to your Coinbase account.
- Browse for setting, and click the ‘setting’ tab.
- Here you will see the ‘API key tab’; click this tab.
- In the new menu, you will see the new API key.
- Open this tab, and type your password.
- Here, you will see the ‘accounts’ tab.
- Select your BTC account for which you are going to create the key.
- Generate a key for your wallet.
Importance of Private Key
Private keys are a great source to make your cryptocurrency wallet safe and secure. Different benefits are associated with these keys, some of which are discussed here.
There are no banks or other deposit sources for cryptocurrencies; these currencies are distributed via blockchain technology. This technology works on certain security keys, and the private key is one of them.
Confirmation of Payments
Public keys are commonly used as public transfers and dealings and are usually known to all your linked persons, just like your email account. When you have to share some amount, the private key confirms that you are in after initializing the process via public key.
Makes Trade Easy
While having your private key, you don’t need to put all the addresses and credentials while making transactions. Private key makes your transactions easy and safe.
In bitcoin, whenever bitcoin is sold or bought, only the private key holder can make transactions.
One of the common complaints of the traders may be hacking. Bitcoin is rare to hack, but its wallets can be hacked if their private keys are leaked. So, private keys prevent your wallets’ hacking.
Safe Storage of Private Keys
Private keys need to be stored anywhere safe and secure so that your wallet remains quite safe. There are usually two options for this process.
You can store the private keys in virtual wallets that are usually offered by Coinbase too. This is referred to as hot storage of the private keys.
Another option to save your keys is by writing them in your diary or notebook. This method is commonly known as cold storage.
Private keys are the backbones of your cryptocurrency wallets. But keep this key secret as any leakage of information may result in hacking.
I am Lavinia by name, and a financial expert with a degree in finance from the University of Chicago. In my blog, I help people to educate by making wise choices regarding personal investment, basic banking, credit and debit card, business education, real estate, insurance, expenditures, etc.