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Public-key cryptography
Public-key cryptography uses a pair of linked keys: a private key you keep secret and a public key you can share. What the private key signs, the public key can check, and the private key cannot be worked out from the public one.
What it means for you. Your wallet address comes from your public key, so you can hand it out to receive funds without giving anyone the power to spend. Anyone who sees your private key, or the seed phrase that generates it, gets exactly the power you have; the chain has no second factor.
Sources: NIST CSRC glossary: public key cryptography, Bitcoin developer guide: transactions, ethereum.org: Ethereum accounts · checked 4 October 2026
Encryption
Encryption turns readable data into scrambled text, called ciphertext, that only someone with the right key can turn back. In crypto it protects things kept privately, such as a wallet file or backup, while Bitcoin and Ethereum transactions themselves are signed, not encrypted, and are public.
What it means for you. A wallet password usually encrypts the key stored on your device; it is not the key. Forget the password and the seed phrase can still restore the wallet; keep only an encrypted file without the seed phrase, and the password becomes the only way back. Anyone who copies that file can try guessing a weak password offline, without limits.
Sources: NIST CSRC glossary: encryption, NIST IR 8547 (initial public draft): Transition to Post-Quantum Cryptography Standards, NIST CSRC glossary: digital signature · checked 4 October 2026