Public keys exist on the blockchain and all network participants can see it.
Public keys are derived from private keys due to their special mathematical relationship with the private keys.
A Complete Guide to Understanding This Blockchain Concept
Once a transaction signed with the private key is broadcasted on the Bitcoin network, public keys are used by the nodes to verify that the transaction has indeed been signed with the corresponding private key.
This process of verification proves the ownership of the bitcoin.
More specifically it makes use of ECDSA to ensure that funds remain secure and can only be spent by the legitimate owner.
If you need to refresh the relevant cryptography concepts, you can refer to , Public Key Cryptography where ECC was explained.
Public keys can be represented in an uncompressed or compressed format.
Public keys are fundamentally x and y coordinates on an elliptic curve.
Why This Matters for Blockchain Technology
In an uncompressed format public keys are presented with a prefix of 0x4 in a hexadecimal format.
In total, the compressed public key is 33-bytes long as compared to 65-bytes in the uncompressed format.
The compressed version of public keys includes only the x part, since the y part can be derived from it.
The reason why the compressed version of public keys works is that if the ECC graph is visualized, it reveals that the y coordinate can be either below the x axis or above the x axis and as the curve is symmetric, only the location in the prime field is required to be stored.
Key Points to Remember
- Public keys in Bitcoin Public keys exist on the blockchain and all network participants can see it.
- Public keys are derived from private keys due to their special mathematical relationship with the private keys.
- Once a transaction signed with the private key is broadcasted on the Bitcoin network, public keys are used by the nodes to verify that the transaction has indeed been signed with the corresponding private key.
- This process of verification proves the ownership of the bitcoin.
Going Deeper: Advanced Concepts
If y is even then it is above the x axis and if it is odd then it is below the x axis.
This means that instead of storing both x and y as the public key only x can be stored with the information that if y is even or odd.
Initially, Bitcoin client used uncompressed keys, but starting from Bitcoin core client 0.6, compressed keys are used as standard.
This resulted in almost 50% reduction of space used to store public keys in the blockchain.
Conclusion
Public keys in Bitcoin represents one of the many innovative layers that make blockchain technology so powerful and transformative. As distributed systems continue to evolve, a solid understanding of these core concepts becomes increasingly valuable — not just for developers, but for anyone building, investing in, or working alongside blockchain-powered systems.
Whether you are just starting your blockchain journey or deepening existing expertise, mastering these fundamentals gives you the tools to think clearly about decentralized systems and make smarter decisions in this rapidly evolving space.