Introduction
Algorand’s swift “Rekeying” feature solves friction for the existing Public key and Private Spending key by allowing users to change their private spending key without having to change their Public Address. This feature enables continuity of use, flexibility, and less operational burden therefore enhancing the functional effectiveness of cryptocurrency and solving the long term problem of inefficiency and onerous operational overhead.
Table of Contents
Conventional Public and Private keys and their Flaws
A public key is a code used in cryptography that allows users to receive cryptocurrencies into their accounts while a private key is a cryptographic code that allows a user to access his or her cryptocurrency. The public key and the private key primarily, are the tools that ensure the security of cryptocurrency operations. Whenever a person carries out his or her first transaction on the blockchain (either bitcoin or any of the alternative cryptos), a special kind of public and private keys are created. These keys are made up of a long string of mixed random alphabets and numbers that help keep the person’s assets in check.
The Public Address is a hashed public key form. Since the public key consists of an incredibly long series of numbers, forming the public address is simplified and condensed. The public address is, in short, a short version of a public key. The public key is also used to confirm the digital signature that approves the ownership of the private key.
How exactly does Public Key work?
Whenever an individual wants to send a particular cryptocurrency to another person, the transaction would be broadcasted to the network where distributed nodes confirm the validity and authenticity of the transaction before approving and recording the transaction on the blockchain. It is pertinent to note that before the transaction is being broadcasted, at first, it is signed digitally using the private key and the public key is usually used to prove that the signature came from the private key. Once all these processes have been passed, the transaction will be verified as valid, and funds are sent to the receiver’s public address.
In a scenario where two people are to engage in a transaction that involves transferring funds in form of coins or tokens to one another, their public addresses will be revealed to each other. A public address is just like a local bank account number and when funds are to be sent locally or internationally using bank networks, the sender will ask for the account number to which the money will be sent, likewise the receiver of the money will see the name or the number from which the money is coming from.
How exactly does the Private Key works?
A private key on the other hand is a complex form of cryptography that allows a person to have access to his or her cryptocurrency. It is also an integral aspect cryptocurrency generally (including bitcoins and other altcoins) and its security set up helps to protect the user from hacking, stealing, and unauthorized access to coins or tokens.
Typically a user is given a public address and a private key to send and receive coins or tokens while dealing with the cryptocurrency. The public address is where the funds are stored and collected. But although a user has tokens deposited into his account, without the special private key, he won’t be able to remove them. In a complicated mathematical algorithm, the public key is generated from the private key. However, reversing the mechanism by creating a private key out of a public key is nearly impossible.
A private key is like a unique key used to access a mailbox by its owner. The mailbox is like a public address or key that can be filled with letters or contents from anyone through those tiny holes, however, only the private key owner can access its content or letters in the mailbox and to give a clearer picture, one can also imagine the private key as a unique number that provides access to withdrawal just like the ones encrypted on a debit card. With it, one can check his/her account balance, make withdrawals, etc.
The Flaws of Public and Private Keys
Since the inception of Blockchain, the system of using public and private keys in cryptography has been the norm however that system is now incapable of doing so much more and cannot be said to be 100% secure. Public and private keys can be very secure however, too much workload can affect the speed of the system and the computational overhead can be very costly. Also, there can be a direct compromise and a false sense of security.
Furthermore, when a private key has been compromised and it needs to be changed, a new account with new public and private keys will be opened and the assets in the compromised account will be transferred into the new account thus creating a lack of efficiency and burdensome operational overhead.
New transactions performed for the first time on newly created accounts require the provision of public addresses for identification purposes. This causes interference with automated recurring transactions and additional workload for institutions and vendors to keep track of the changing public addresses.
Algorand’s Unique Rekeying and Benefits.
Benefits
Algorand’s Rekeying is special and distinct because there is no other blockchain that can modify private spending keys so quickly and effectively, as it is
- A quick and seamless way of maintaining the permanence of account.
- Protect current accounts at any time with a new Private Spending Key like a hardware wallet, multi-sig account, or smart contract key.
- A novation with the ability to reassign contract ownership
- Often this is done in the form of reassigning ownership of a contract and often in a larger context of settlement.
- With blockchain, accounts can now reassign ownership with trust and in the atomic transfers/settlement sense.
Uniqueness
These benefits are enjoyable due to Algorand’s unique functionalities which include;
- Flexibility while modifying the Private Spending Key at any time without modifying the Public Address.
- The continuity that allows you to continue using your Public Address and keep the funds in the same Public Address.
- Operational Efficiency to maintain existing Public Address as identifiers or other persons and custody providers in a continuous transaction with that Public Address, reducing operational burdens.
Algorand continues to power the De-Fi evolution and blockchain as a whole by always coming up with innovative measures to improve the deficiencies and shortcomings of the cryptocurrency world at large.
