Digital currency wallet address principle

Digital currency wallet address is an identifier used to store and trade digital currencies, similar to a bank account number. Based on public key encryption technology, it contains a public key (encrypted to receive transactions) and a private key (authorized to send funds), generated through a hash function. Wallet addresses are not anonymous, and while transactions can be anonymous, addresses can be linked to personal identities. Different types of wallet addresses include Bitcoin addresses, Ethereum addresses, and multi-currency addresses.

Principle of digital currency wallet address

1. What is a digital currency wallet address?

A digital currency wallet address is an identifier similar to a bank account number and is used to receive, store and send digital currencies.

2. How the wallet address works

The digital currency wallet address is based on public key encryption technology, which includes two keys:

• Public Key: A public, shareable key used to encrypt transactions sent to this address.
• Private Key: A private key that the holder can use to decrypt transactions and authorize the sending of funds.

3. Address generation process

The digital currency address generation process is as follows:

1. Generate a public key/private key right.
2. Enter the public key into a hash function (such as SHA-256) to generate a hash value.
3. Enter the hash value as input into the hash function again to generate the final wallet address.

4. Security of wallet address

• #The security of the private key is crucial: If the private key is Leaked, the attacker can take control of the funds in that address.
• The public key is publicly shareable: Others can use the public key to encrypt transactions sent to that address, but not to decrypt them.
• Wallet addresses are not anonymous: While the transactions themselves may be anonymous, wallet addresses can be linked to personal identities.

5. Different types of wallet addresses

There are different types of wallet addresses, including:

• Bits Coin address: starts with "1" or "3".
• Ethereum address: Starts with "0x".
• Multi-currency address: Supports multiple digital currencies and uses different prefixes to identify different types of addresses.

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