Never ever, and that means EVER, reveal your private key to anyone. That means it is better you take it with you to the grave or lock it up with a will rather than entrust it with a third party or anyone you know. There are plenty of stories of how careless people can get with their private keys. This has led to unrecoverable funds, digital identity theft and hacked digital wallets. If you were to give your private key to someone and they lose it, your only chance of recovery would be the seed phrase generated during the key creation for your digital wallet. If you lost those seed phrases, good luck because chances are there is no other way to recover your private key.
Why is it so hard? This is probably the reason mainstream finance is turned off by cryptocurrency. Digital wallets are mostly not user friendly and there is no technical support to help users recover their funds or private keys. The apps provided for cryptocurrency are open source, and available to the public but there is no one supporting it directly. It is decentralized, so the best resources to contact are members of the community who are knowledgable about the subject. Unfortunately, not even the top tier engineers and developers of the cryptocurrency can help you recover or generate a new private key unless it is for a new digital wallet.
What many people don’t understand is that private keys were not meant to be recovered. Only one unique private key is created for a digital wallet, and that means there is no master key that can open a backdoor to help anyone recover their funds. That was by design due to the open source and decentralized nature of the blockchain. This sounds like a bank is still the best place to store your wealth because they provide full customer support. Now I am going to explain the difference between a bank and the blockchain, in the context of cryptocurrency and private keys.
Banks are highly centralized and they are pretty much in control of your wealth. No matter how much money you have deposited in a bank, policies still dictate how much you can withdraw, where you can send your money and what you can do with it. If a bank were to go bankrupt, your funds go along with it. Banks won’t voluntarily give you all their money if they are closing. You lose all your wealth in the worst case scenario. In times of financial crisis, banks can also stop withdrawals to prevent bank runs. You are mostly at the mercy of your bank when it comes to money, and they will gladly take what you deposit while giving you permission to withdraw your own money. It doesn’t really make sense, but that has been the mainstream banking system for decades now.
Compare that to cryptocurrency and the blockchain, you have financial independence. You control your own wealth through your private key, which is why it is so important not to lose it or let others access it. A private key is not even a tangible object, it is a digital code consisting of numbers that have been cryptographically generated and stored as a file. From your private key you get a public address which is created from your public key. The public key is derived from the private key to generate the public address. This is like your account number that is allowed to be exposed on the network. Funds deposited or withdrawn are recorded on the blockchain. The private key also authorizes you to send and receive funds using a digital signature. The digital wallet is basically where you store the private key. To keep the private key safe, store the file away from your computer or online drive. The best recommendation from experts is to use a hardware wallet, which is an offline device that secures private keys. That would prevent hackers from accessing it online since the only way to access it is from the device.
The lesson here is that if you want financial independence and control of your own wealth, it requires plenty of responsibility. That includes managing your private key by keeping it in a safe storage location like a hardware wallet. Make a backup, but store it wisely and not somewhere it can be accessed publicly (e.g. file sharing site). You can copy it to a thumb drive to be stored in a vault or a secure enclave in a smartphone if supported. There will be more robust solutions for key recovery systems for digital wallets, but until that time comes, users should always be alert regarding their private key. If anyone asks for your private key so they can send you funds, ignore that request. There is never any reason to reveal your private key to anyone. It is not like a driver’s license number or SS number which you do need to provide sometimes. A private key should only be known by its holder and never shared or revealed to anyone. You have the right to protect your privacy and it is secured through cryptography on a blockchain.
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