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Addresses and wallets

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Along with the term “wallet,” the term “address” is important in the context of blockchains. An address is basically nothing more than a postal address, just like 8 High Street is an address. Of course, it is a little more than that in a blockchain system because computers first have to resolve and translate 8 High Street into computer language to be able to work with it. That is no problem at all for a computer; it does that effortlessly with links.

The problem, however, is in the length and uniqueness of the address. As in real life, you can’t send anything to 8 High Street if you don’t know the postcode or at least the town or city. Just like a physical address consists of more than just the street name, the address in the context of blockchains has to be a little more detailed to ensure the unequivocal identification of the recipient.

Here is an example of an address for the crypto-token SIA:

2077ffcc79143aa8a1ba36ba934873f7e8d65085f212ce220dfacd267c8291e4d6ebc0923f09

And here is a Bitcoin address:

1Po9VrtwJzHQycEDS3i9JojUUT4dkYteMs

It is easy to see the difference between the two addresses—especially the difference between these and 8 High Street, Anytown.

Addresses must have one very important feature that is critical to the success of a blockchain system—they must be unambiguous.

In addition to this, there must absolutely be enough of them. The so-called “Address space” must be big enough to satisfy all possible requirements. In contrast with physical addresses, there are no upper limits because, in theory, everyone can have as many addresses as they wish. This is an important difference to the real world. In most countries, registration of one main residence is legally required, even though some people have a second or even third residence. However, these addresses, whether a summer home or a flat in the city, also generally have to be registered. With the blockchain, there are no such limitations or requirements.

Chapter 9 — Nodes, Consensus and Mining

Bitcoin, Blockchain & Co.

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