If you buy and hold Bitcoin on a website exchange, such as Kraken.com, or in an online wallet. such as Blockchain.info, you will not know about private keys because you do not need to. While they are there behind the scenes, the exchange or online wallet is handling them for you. However, if you have or plan to hold Bitcoins on a smartphone wallet, you do have to know something about them.
Private keys are vital to Bitcoin. They do two things. They verify (sign) Bitcoin transactions as sent by you and they generate Bitcoin addresses (public keys). When you send Bitcoin, you send from your address to the receiver’s address.
Private keys are generated mathematically from a 12 or 24-word phrase called a “seed.” It is like the stalk of a plant. The private keys come from the seed and the public keys (addresses) come from the private keys.
When you first set up a smart phone wallet, you will be told to write down your seed (phrase) and store it securely because anyone who gets your seed can control your Bitcoin. If you lose your wallet, you can recreate your account with the seed.