Private Keys, Mnemonics, Keystore Files – What Are They and How Are They Different
If you have been exploring the blockchain world, you might have crossed at least one of these terms. Private keys, Mnemonic phrases, and Keystore files are the most popular ways to give access to a crypto wallet or account. Even though these three serve the same purpose – give secure access to something – they work very differently. In fact, they also present different levels of security for the users. That is why understanding what private keys, mnemonics, and keystore files are and how they are different from each other is important. It will allow you to decide which wallet or account fits better your needs and security standards.
Starting With the Basics
Whenever you open an account on the blockchain, be that a wallet or an exchange account, it will consist of two parts: the public key and the private key.
The public key is your public address or at least kind of that. In some networks, this is not the case since they might have a separate public key that acts as a middleman that you won’t even see. But to make the understanding of these concepts easier, let’s state that the public key is sort of your public address that you can share with your contacts so they can send you tokens, for example. Thus, the public key is like your email address or postal address.
The private key, on the other hand, is the method you use to access whatever is inside that account. In the case of a crypto wallet, for example, the private key is the method you will use to access your assets stored in the wallet. This is the piece of information that cryptographically verifies you are entitled to transfer these assets. It can be compared to your email account’s password or the key to your mailbox.
The Difference Between Private Keys, Mnemonics, Keystore Files
Understanding the difference between these terms becomes easier if explained gradually. That is because a given platform on the blockchain doesn’t need to choose between one or the other, but instead it can sometimes overlap them to be more secure and add further features. So, let’s go in stages:
After you create a crypto wallet, an address will be generated that will be unique to your wallet. This address, which is the same as the public key in most cases, cannot be modified. However, it can be simplified, for example by using a blockchain domain name service.
When you create or import your wallet, you will also have to set a password. This password can be modified in the future either by inserting your old password or by re-importing your wallet with a mnemonic or private key. The password encrypts and decrypts your wallet on your device locally.
Now let’s get into what you are here for:
A private key is a number of random characters that can give you access to your account. You will get your private key after creating your wallet and entering your password.
A wallet has only one private key that can’t be modified. If you lose your private key, you won’t be able to recover it with your password. But with the private key, you can reimport your wallet and reset your password. Thus, the private key must be kept safe and cannot be revealed to anyone, otherwise, someone else will be able to transfer money from your wallet using it.
A Keystore file, also known as UTC/JSON files, is a file created with your private key and a password of your choice.
Private Key + Password -> Keystore File
It basically encrypts the private key of your wallet. This way, your wallet is slightly more secure than just with a raw private key. It is important to know that if you simply have the Keystore file (no password), you won’t be able to “travel backward” to acquire the private key. However, if the password is combined with the Keystore file, you will be able to find your private key:
Keystore File + Password -> Private Key
A Mnemonic Phrase, which is also known as seed phrase and secret recovery phrase, is a variation of a private key and works slightly similar to it. A seed phrase is composed of a set of words that most commonly varies from 12 to 24 words and are separated by a space. This can add extra security to your account. Mnemonic Phrases more or less look like this:
magician crumble practice give trust close laugher whole path late fire least
These phrases may be used to generate a theoretically limitless number of accounts. Mnemonic Phrases are often used in conjunction with hardware wallets and should be written down by the user on a piece of paper to safely back up their digital assets.
Mnemonic Phrase + Derivation Path + (optional) Password -> Private Key
The derivation path is a numerical representation of the private key/address to which you want to get access. Different from a Keystore file, it is impossible to turn a private key into a mnemonic phrase. It is only a one-way street. Thus, keep your mnemonic phrase stored in a safe place, because it will be your main access and restore wallets that use it. Adding a password on top of mnemonic phrases is optional, like how Keystore files have a password.
Some of the main benefits mnemonic phrases offer are that they are easy to memorize, secure, simple to store, and reading them is smooth to the human eyes.
While the mnemonic can restore your wallets and enable you to export private keys, private keys won’t enable you to re-export your mnemonic in case you lost it. Seed phrases should be treated as your most important way to access your wallet and backed up safely.