1.4: Seed Phrase, Private Keys, and Public Keys — Intro

This is a key module to understand if you harbour a desire to invest any material amount of your wealth into cryptos. The objective of this module is to provide an introduction into the practical use of public and private keys in relation to cryptos.

Before the mid-1970s all cipher systems relied upon the sender and the receiver to know the cryptographic key. A simple example might be "Move all letters one to the right in the alphabet".

In the mid-1970s the theory of a public and private key pairing was put into practice. The key points to understand are:

• Using a random input, a unique seed phrase is created.
• The seed phrase can be used to create an unlimited number of private keys.
• The private keys can be used to create an unlimited number of public keys.
• The public keys can be widely disseminated with no risk to your security.

In the context of sending a secure, encrypted message (think WhatsApp or PGP for emails) the sender uses the public key of the receiver to produce an apparently meaningless message. The receiver uses their own private key to decrypt that message. Note that no-one can decrypt that message unless they have the private key. The corollary is that anyone who does have the private key can read the message.

This is a very important concept to understand in the crypto world.

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