The primary advantage of public-key cryptography is increased security: the private keys do not ever need to be transmitted or revealed to anyone. In a secret-key system, by contrast, there is always a chance that an enemy could discover the secret key while it is being transmitted.

Another major advantage of public-key systems is that they can provide a method for digital signatures. Authentication via secret-key systems requires the sharing of some secret and sometimes requires trust of a third party as well. A sender can then repudiate a previously signed message by claiming that the shared secret was somehow compromised by one of the parties sharing the secret. For example, the Kerberos secret-key authentication system involves a central database that keeps copies of the secret keys of all users; a Kerberos-authenticated message would most likely not be held legally binding, since an attack on the database would allow widespread forgery. Public-key authentication, on the other hand, prevents this type of repudiation; each user has sole responsibility for protecting his or her private key. This property of public-key authentication is often called non-repudiation.

Furthermore, digitally signed messages can be proved authentic to a third party, such as a judge, thus allowing such messages to be legally binding. Secret-key authentication systems such as Kerberos were designed to authenticate access to network resources, rather than to authenticate documents, a task which is better achieved via digital signatures.

A disadvantage of using public-key cryptography for encryption is speed: there are popular secret-key encryption methods which are significantly faster than any currently available public-key encryption method. But public-key cryptography can share the burden with secret-key cryptography to get the best of both worlds.

For encryption, the best solution is to combine public- and secret-key systems in order to get both the security advantages of public-key systems and the speed advantages of secret-key systems. The public-key system can be used to encrypt a secret key which is then used to encrypt the bulk of a file or message. Public-key cryptography is not meant to replace secret-key cryptography, but rather to supplement it, to make it more secure. The first use of public-key techniques was for secure key exchange in an otherwise secret-key system; this is still one of its primary functions.

Secret-key cryptography remains extremely important and is the subject of much ongoing study and research.