Using private key for spending bitcoin

[toggle57]

Noob here...

To receive bitcoin all that is needed is the public key (address)

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

Transacting with this private key without encrypting it would be unsecure... so how does this work? Is this what a digital signature is?

I've researched this a lot and can't seem to find a clear answer.

Thanks in advance... and for your patience.

[batang_bitcoin]

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

No.
You don't need to enter your private key if a platform/exchange is asking you to do that. You only use private keys when you're accessing/restoring your wallet but to input it anywhere like exchanges, you don't do that. That is like giving your bank account and pin code to them.
Did you find an exchange that asks your private keys to convert?

[LFC_Bitcoin]

Don’t give anybody or any service your private key(s). If you let anybody see your private key(s) then your coins are as good as gone.



https://bitcoin.org/en/getting-started

Private keys - For your eyes only
Public keys - To send & receive bitcoin

[Bitcoin_Arena]

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

Almost all the exchanges that convert bitcoin to fiat are custodial, meaning you will have to spend the bitcoins to their addresses which they already have control of (private keys inclusive) So by sending Bitcoins to your account in such exchanges, you are actually trusting a third party service to send you back Fiat currency in exchange.

The other way of converting bitcoin to fiat is through p2p cryptocurrency exchange which involves an escrow

[dunfida]

No. 1 rule here on crypto space. Never ever give or input your private key anywhere and once you've done it then say goodbye to your coins.

No exchange will really be asking out for private key and its a good thing that you had asked here first before making any further step.

When cashing out your coins then you dont need PK and put up it to your mind.

[hosseinimr93]

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

You need the private key to sign the transaction when you send bitcoin from your own wallet (not exchanges, custodial wallets, etc). The signature you create for a transaction proves that you are the owner of the address.

Transacting with this private key without encrypting it would be unsecure... so how does this work? Is this what a digital signature is?

As long as your private key isn't compromised you are safe. It's impossible to brute-force the private key.
I feel your concern is that the private key is disclosed when you sign a transaction. Note that nodes don't need your private key for validating your signature.

Each time you sign a transaction, you broadcast a signature and a hash.
Nodes use your public key and your signature, do some mathematical calculations and obtain a hash. If the hash you broadcast matches the hash calculated by nodes, they will validate your transaction.  

[toggle57]

Yes guys I totally understand that revealing my private key is bad... thats not really the crux of my question.

If sending money to an address only requires only a public key which is safe - how does one take money out of an address work - I thought the private key was required - and if its required, I would never want to send that to any web page or exchange unencrypted where they could log it and steal it.

I am trying to understand what the process of pulling my money out of bitcoin back to fiat would be.

thanks everyone.

[toggle57]

Each time you sign a transaction, you broadcast a signature and a hash.
Nodes use your public key and your signature, do some mathematical calculations and obtain a hash. If the hash you broadcast matches the hash calculated by nodes, they will validate your transaction.  

Thanks so much, this is really what I was getting at... so ones wallet software uses the private key to create a signature/hash and this is what gets transmitted over the wire, or to an exchange then? That makes sense... I just could not understand how one could transact using a private key directly.

Much appreciated.

[BitMaxz]

Yes guys I totally understand that revealing my private key is bad... thats really the crux of my question.

If sending money to an address only requires only a public key which is safe - how does one take money out of an address work - I thought the private key was required - and if its required, I would never want to send that to any web page or exchange unencrypted where they could log it and steal it.

I am trying to understand what the process of pulling my money out of bitcoin back to fiat would be.

thanks everyone.

If this is your first time in crypto world I suggest you start exploring first or go directly on this topic "[General] Bitcoin Wallets - Which, what, why?"

Private key is required to make a signed transaction but I don't recommend you to import the private key to any online sites or exchanges. If you want to be safe use a custodial wallets like Electrum.

Once you imported the private key to Electrum as sample you can able to spend or send anytime to any exchanges and convert or exchange them into fiat.

[toggle57]

Thanks BitMaxz,

Its the signing part I was missing.

I've done a lot of research to get to this point. The problem is that many times subtle parts like this get glossed over or assumed.

For example: Another big issue I had was the question of where "Value" is stored (i.e. ones account balance).

This was unclear to me for a long time and many people describing it would say things like "store your bitcoin in your wallet" - which is not where the value goes... it lives on the blockchain and your wallet only ever contains the address (public key) that points you there.

The struggle I had with the exchange I was using to clarify this point was epic. It was no surprise to me that the support people on exchanges often have less knowledge than those asking the questions.

Once I understood that a lost or destroyed wallet could be recreated and no value was lost it became clear to me that the value was not in the wallet.

Thanks everyone... great community.

[chanler]

To receive bitcoin all that is needed is the public key (address)

No, to receive the Bitcoin, you need a wallet address. You can use an Electrum wallet to have the BTC address.
A private key is common to be used to access the wallet on a certain platform.

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

Actually, if your BTC has been in exchange, commonly you need to input a password and also username or email, or other ways to login to the exchange platform. But, if you BTC is still in your own wallet, you need to send/transfer/withdraw it to the excahnge.
To get money, after login to the exchange, you need to sell the BTC into fiat (USD or others).

I think that you need to learn more the basic about Bitcoin, wallet, exchange, and also other basic knowledge about the crypto world. Do not be hurry because it will not be good for you.
You can visit Beginners & Help to google. Learn it slowly to get more information. You can also earn it by browsing in the g

[aesma]

Each time you sign a transaction, you broadcast a signature and a hash.
Nodes use your public key and your signature, do some mathematical calculations and obtain a hash. If the hash you broadcast matches the hash calculated by nodes, they will validate your transaction. 

Thanks so much, this is really what I was getting at... so ones wallet software uses the private key to create a signature/hash and this is what gets transmitted over the wire, or to an exchange then? That makes sense... I just could not understand how one could transact using a private key directly.

Much appreciated.

Yeah what you're missing is the concept of wallet. It's possible to use bitcoin without a wallet, but that means being a programmer and scripting everything, not really an option. So you use a wallet. There is a risk in that, as some wallets are fraudulent, so you must be careful when you get one. And here we mostly don't approve of online wallets, because you don't really control your keys.

[toggle57]

No, to receive the Bitcoin, you need a wallet address. You can use an Electrum wallet to have the BTC address.
A private key is common to be used to access the wallet on a certain platform.

So you are saying a wallet address (or wallet) is a container for one or more crypto currency addresses - where as, a specific crypto currencyaddress would be a specifc public/private key pair that is stored on that wallet?

I have always understood that wallets may be used to house several crypto platforms however when I hear "wallet address" I think a specific private/public key pair within that wallet. Perhaps I am misunderstanding you but it sounds like you are saying the one must first address the wallet - then address the crypto currency platform account within that wallet. I've read a lot about this and never seen this as a two step process. Every example simply addresses directly to the key of the crypto account.

I think that you need to learn more the basic about Bitcoin, wallet, exchange, and also other basic knowledge about the crypto world. Do not be hurry because it will not be good for you.
You can visit Beginners & Help to google. Learn it slowly to get more information. You can also earn it by browsing in the g

I have no doubt that this is true... I've read a huge amount already but most of it goes over the same points, sometimes contradicting other sources, sometimes skipping subtle details. I'm a retired software developer... I know the drill .

[OcTradism]

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

Transacting with this private key without encrypting it would be unsecure... so how does this work? Is this what a digital signature is?

Private key is used to sign signature for your transactions. That is the evidence that you are owner of that wallet, that address and sign to send it to a receiver.

If anyone ask you to give up your private key when you are in offer for one transaction, your trade partner is a scammer whom is trying to steal your private key. If the scammer has access to your private key, all of your bitcoin will be stolen in a blink of eyes.

The chapter 4: Keys, Addresses of Mastering bitcoin can help you understand more.
https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch04.asciidoc

[o_e_l_e_o]

Its the signing part I was missing.

So, put simply, when you create a transaction, your wallet creates a string of characters which encode things like which bitcoin you want to spend in the transaction, which addresses you want to send it to, how much you want to send to each address, and some other data. Your wallet will then use some of that transaction data, along with your private key and a random number, perform some mathematical operations, and produce a digital signature. The signature is then combined with the transaction data and broadcast to the blockchain.

When nodes receive your transaction, then can use a combination of the transaction data and the combined signature to verify that the signature was indeed produced by the private key associated with the bitcoin being spent, but the process does not reveal any information about your private key itself.

There is an easy to understand explanation of this here: https://learnmeabitcoin.com/beginners/digital_signatures_signing_verifying
And a harder to understand explanation of this here: https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch06.asciidoc#how-digital-signatures-work

Perhaps I am misunderstanding you but it sounds like you are saying the one must first address the wallet - then address the crypto currency platform account within that wallet.

I'm not entirely sure what you mean by cryptocurrency platform in this context. Can you elaborate? Do you mean different coins other than bitcoin?

An address is indeed referring to a specific key pair. This is usually housed within a wallet which contains multiple key pairs, although it is possible to produce individual key pairs. To send coins to an address, you only need to know that address - you do not need to know any information about the wallet it may be stored within.

[blckhawk]

Noob here...

To receive bitcoin all that is needed is the public key (address)

However to spend ones bitcoin or convert it back to fiat currency through an exchange it looks like one must enter a private key.

Transacting with this private key without encrypting it would be unsecure... so how does this work? Is this what a digital signature is?

I've researched this a lot and can't seem to find a clear answer.

Thanks in advance... and for your patience.

Yes, for you to receive a Bitcoin public key or address is necessary. On the other hand, you don't need to enter your private key on the exchange. Private keys must keep it to yourself and don't share it with anyone otherwise your funds will be in a lot of trouble. It is more likely private key can be comparable with a common password, it needs to access your wallet so if you give it to anyone you just basically sharing your stash. Your private key will be your digital signature and will be your evidence that you were the owner of your wallet. If it happens that the exchanges require your private key, you should stay away from it because this is definitely a phishing site.

[akirasendo17]

if you are in exchange you don't need to enter a private key or something, if you have your own wallet and want to send your bitcoin to an exchange you need to open your bitcoin wallet with a key, now only use your key if you were going to open your wallet remember never enter that wallet or make mistake like use that key as an address, your funds will be lost, don't mistakenly use your key as an address be very carefull.

[enhu]

Thanks BitMaxz,

Its the signing part I was missing.

I've done a lot of research to get to this point. The problem is that many times subtle parts like this get glossed over or assumed.

For example: Another big issue I had was the question of where "Value" is stored (i.e. ones account balance).

This was unclear to me for a long time and many people describing it would say things like "store your bitcoin in your wallet" - which is not where the value goes... it lives on the blockchain and your wallet only ever contains the address (public key) that points you there.

The struggle I had with the exchange I was using to clarify this point was epic. It was no surprise to me that the support people on exchanges often have less knowledge than those asking the questions.

Once I understood that a lost or destroyed wallet could be recreated and no value was lost it became clear to me that the value was not in the wallet.

Thanks everyone... great community.

Be careful when you ask for help/support on the telegram channel of the exchange, whichever exchange it is. There are many scammers in telegram channel acting as support of the exchange, you'd be surprised they know nothing actually but will ask you to send BTC.

Its very unlikely for an exchange to ask private key, it basically just need a password and 2fa to get into your account. If it asks for a private key, you might wanna ask around and check the URL of the site.

[seoincorporation]

Yes guys I totally understand that revealing my private key is bad... thats not really the crux of my question.

If sending money to an address only requires only a public key which is safe - how does one take money out of an address work - I thought the private key was required - and if its required, I would never want to send that to any web page or exchange unencrypted where they could log it and steal it.

I am trying to understand what the process of pulling my money out of bitcoin back to fiat would be.

thanks everyone.

To spend the bitcoins on any address you need a wallet, some wallets generate the address and they store the privatekey for you, if you have the private key of an address you can inport it to a wallet and then spend the coins.

Another good example of this is that you can generate a vanity address, send bitcoin to it and save the privatekey somewhere, and when you want to spend those coins you can to import the privatekey to a wallet. That's how it works.

[aesma]

No, to receive the Bitcoin, you need a wallet address. You can use an Electrum wallet to have the BTC address.
A private key is common to be used to access the wallet on a certain platform.

So you are saying a wallet address (or wallet) is a container for one or more crypto currency addresses - where as, a specific crypto currencyaddress would be a specifc public/private key pair that is stored on that wallet?

I have always understood that wallets may be used to house several crypto platforms however when I hear "wallet address" I think a specific private/public key pair within that wallet. Perhaps I am misunderstanding you but it sounds like you are saying the one must first address the wallet - then address the crypto currency platform account within that wallet. I've read a lot about this and never seen this as a two step process. Every example simply addresses directly to the key of the crypto account.

I'm guessing you're talking about multicurrency wallets here, not regular wallets only used by one coin. Multicurrency wallets use the same key words to generate a private key for several crypto assets, so that complicates things a bit.

A basic wallet like bitcoin core only deals with bitcoin so there is no "platform", you get into your wallet with a password and then you can send/receive BTC.