Ethereum: What exactly happens when a new wallet is created?

What happens when a new wallet is created?

When you create a new Ethereum wallet, several important files and pieces of information are generated to facilitate your interactions with the Ethereum network. In this article, we’ll look at what each of these components represents and how they contribute to your overall experience.

1. Private Key

A private key is a unique secret code used to sign transactions on the Ethereum network. It is essential for verifying the ownership and authenticity of coins received from other users or transactions on the blockchain. A new wallet typically generates a new private key when you create it, which can be stored securely on your device.

2. Public Key

A public key, also known as an address, is a unique string of characters used to receive and send Ether (ETH) on the Ethereum network. It is essentially a digital identifier that serves as proof of ownership for each account. When you create a new wallet, it usually generates a new public key, which can be shared with others or stored securely.

3. Transaction Signature

When you send transactions to other users or nodes on the Ethereum network, your private key is associated with a unique transaction signature using the “Keccak-256” algorithm. This signature verifies that you, as the account owner, authorized the transaction and that it complies with the agreed-upon rules. The public key, together with the transaction signature, forms the hash of the transaction data.

4. Blockchain Address

The blockchain address is a unique string of characters (usually eight or twelve) that represents the balance of your Ethereum wallet. It is often displayed as “0x…” followed by a hexadecimal representation of its length and a sequence of eight to eleven digits. This address can be used to receive Ether, send Ether to other users, or access specific features on the Ethereum network.

5. Account Balance

The account balance is the current total value stored in your Ethereum wallet’s private key. It reflects the sum of all coins, tokens, and other assets that belong to you as the account owner.

6. Private Key (Wallet Seed)

In some cases, a new wallet may generate a wallet seed when it is created. This seed consists of a series of words used to create a new Ethereum wallet with a specific key pair. The private key is generated using the seed and can be shared or stored securely to facilitate future transactions.

Is Public Key the Same as Address?

While the two terms are often used interchangeably, they refer to slightly different things:

• Public Key

  : A unique string of characters representing a digital identifier that serves as proof of ownership for an account. It is usually displayed on a blockchain address (e.g., “0x…”).

• Blockchain Address

  : The actual public key used to receive Ether or access specific features on the Ethereum network.

In short, when you create a new wallet, it generates:

• A private key

• A public key (address)

• A transaction signature

• A blockchain address

The private key serves as a unique authorization code for transactions, while the public key represents your ownership and identity on the Ethereum network.