Aug 24, 2020
Rekeying: Algorand’s Unique Key Management Approach
Traditionally, a Public Address and Private Spending Key combination cannot be broken; the two always come in distinct pairs. This means that every time a user changes one, they must change the other. With increasing usage of keys, this has become an inefficient and not always secure way to manage Private Spending Keys and Public Addresses.
When a compromised Private Spending Key needs to be changed, an entirely new account with a Public Address and a Private Spending Key need to be opened - and assets moved from the old Public Address to the new. There was no such thing as just changing the Private Spending Key...until now.
Algorand’s New Rekeying Feature allows users to change their Private Spending Key without the need to change their Public Address. Today, most blockchains require a complete transfer of funds from one wallet to another, to enable trustless transactions between two parties, which creates substantial inefficiencies and unnecessary risks.
More Flexible, More Secure
Algorand Rekeying circumvents these risks and inefficiencies with more flexibility that are secure. Regularly changing the Public Address and Private Spending key means that there is no consistent identifier for that user in a system or with an institution they use. Everytime a user wants to initiate a transaction, they must provide the new information (new public address) to peers and institutions they interact with in order to transact; therefore any recurring transactions with peers or institutions do not have permanence, as their address is lost each time they change their Private Spending Key.
Custody providers, as an example, encounter significant operational issues today as they must manage many Private Spending keys and create processes around a constant flow of funds for their customers. Rekeying enables key unique functionalities wherever a digital wallet or account is enabled with Algorand’s blockchain, which unlocks many possibilities for greater security, fast private key changes, low operational overhead for custody providers and much more. It enables Public Address continuity of use and solidifies it as a permanent identifier for less operational overhead with each change of the Private Spending key.
Rekeying enables users to have the: