How Cryptocurrency Works: PUSH Transactions & Private Keys Explained
Banks use a PULL model: merchants can pull funds from your account with your authorization. Cryptocurrency uses a PUSH model: only the holder of a private key can push funds out of an address. No third party can initiate a transfer. This fundamental difference changes the security model, the responsibility model, and the failure modes entirely.
- Cryptocurrency is a PUSH system: only private key holders can initiate transfers
- Banking is a PULL system: third parties can pull funds with authorization
- Each address is controlled by a cryptographic private key — loss means permanent loss
- The UTXO model tracks ownership through unspent transaction outputs, not account balances
- Transaction signing proves ownership without revealing the private key
Full interactive article with on-chain data available at ltc.supply/news/how-crypto-works