Earlier we discussed about Bitcoin Wallet which we described it being a personal database to store the digital private keys that are important to access the Bitcoins addresses. You may now wonder what exactly is the Bitcoins address and how is it generated?
In order to withdraw the Bitcoins from your account, you need a unique address which seems similar to your email address. A website, that regulates Bitcoins transactions, assigns an address to your BTC account which aids you to transfer funds into your account at that site. This address is the Bitcoins Address. Each BTC address is of only about 500 bytes and possesses a built-in check code to prevent BTC transactions to a mistyped address. It contains maximum of 34 characters with both numbers 0-9 and alphabets A-Z (or a-z) except the four characters 0, O, I and l since they may create visual ambiguity. On the other hand, it’s interesting to note that these addresses come in Base 58 format that eventually removes the possibility of similar looking characters, such as 0 and O, but still these characters are ignored while creating the address. Moreover, these addresses are precise and case sensitive.However, each address has two parts: the public key and the private key, where the private key is significant as it lets the user to spend the bitcoins on its corresponding public key.
Consider an example of BTC Address: 3AEtHQD7RiAE6uzMj2ZifT9YgNrkSgzQX
Above is a 33 characters BTC address that contains various letters and numbers. Here, it begins with number 3 which, in this case, signifies the BTC payment target. Digit 3 at the beginning stands for address with multiple private keys, unlike digit 1. You can verify the address validation using designed codes in different languages. Each address has a secret matching private key (a 256 bit number) stored in BTC Wallet that is necessary for fund facilitation associated to the respective address. However, this address can be calculated from the private key, but the converse is not true.
Now you know, basically, the BTC addresses exist so that the BTC users can send the bitcoins to one another by sending the bitcoins to the unique address usually specified for each transaction.Unlike e-mail, this address may change on receiving fund; hence, you must stay alert while sending bitcoins to the same old address.
Bitcoins Address Generation
Before we proceed to check out how the BTC Address is created we must get familiar to the different kinds of BTC Addresses. First type is the basic address with a single private key and generally, begins with number 1. The other type is address with multiple private keys. Pre-generating this kind of address, the user must take into consideration the quantity of private keys required and the corresponding public keys.
BTC Address can be generated offline using the Bitcoin-Qt software. Some mathematical operations such as cryptographic hash functions are performed on the generated random numbers to get the matching public and private keys.
Selecting a random number is a prime job. Next, create an ECDSA (Elliptic Curve Digital Signature Algorithm) private or public key pair with the selected number. The public key is usually referred to being the BTC address itself, but this is not the case. The BTC addresses are the modified versions of public keys. Let the newly created corresponding public key to go through SHA-256 (Secure Hash Algorithm- 256) hashing. Then, perform RIPEMD-160 (RACE Integrity Primitives Evaluation Message Digest- 160) hashing on the result of previous operation. After addition of version byte at the prefix, again operate SHA-256 hashing over the extended RIPEMD-160 result. Each prefix with a specified leading symbol has a particular role/use in the address. Note that the prefix assigned is usually 1 for most of the bitcoin addresses, representing a public bitcoin network address. Ultimately, it gets converted to its required format of Base-58.
At the rarest of rare case, it is possible that two different users would generate same BTC address independently. Such a case is called as Collision and the bitcoins associated to these same addresses are called as Colliding Bitcoins. In this case, both the Bitcoins owners would be able to spend their currencies on that particular address.
Thus, you are now aware of the format and content of Bitcoin Address. Although producing a BTC Address seems to be complex, but the Bitcoin Owners create numerous of the addresses since it doesn’t occupy lot of space of the BTC Wallet. It is also advised to do so in order to secure the fund transactions. Using public-key cryptography, you can sign the data with your private key and the validity of signature can be verified if your public key is known. Don’t be careless about the private key storage in your BTC Wallet, treat your Bitcoins as cash and enjoy BTC addressing!
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