Key Points
Checksums serve as a unique identifier for data, detecting potential errors during data entry or transmission. They act like a unique fingerprint for data, enabling quick confirmation of its integrity.
Similar to the error-correcting codes in barcodes, checksums verify that data has been accurately entered or transmitted.
Checksums in Data Transmission
During data transmission, the sender computes a checksum for a piece of data and sends both together.
The receiver then recalculates the checksum upon receiving the data, comparing it with the sender’s to confirm that no changes were made during the transmission.
If the checksums don’t match, it implies that errors have occurred, and the data may need to be resent.
Checksums are vital in applications such as file storage, network communications, and Ethereum transactions, where even minor errors can lead to significant issues.
Ethereum addresses within the Ethereum network serve as unique identifiers for cryptocurrency transactions.
These addresses, represented by hexadecimal strings, are generated using both public and private keys and come in two forms: checksummed and non-checksummed.
The checksummed version, with 42 characters including capital letters, is significant due to its integrated error-checking feature, which reduces the likelihood of funds being sent to the wrong address due to typographical errors.
A checksum algorithm is used to determine the case of each letter in the address when a checksummed address is formed, resulting in an address with both capital and lowercase letters.
If the address is typed incorrectly, the checksum will fail, alerting the sender to the error.
Therefore, to prevent the loss of funds due to human error and ensure transaction accuracy, it is crucial to use Ethereum addresses in their checksummed version.
Ethereum Improvement Proposal (EIP) 55 introduced checksums to Ethereum addresses.
This mix of capital and lowercase letters adds another layer of error detection when transmitting or receiving cryptocurrency, making checksummed and non-checksummed addresses easily identifiable and reducing the likelihood of inadvertent errors during transactions.
However, swapping certain similar-looking letters (like a lowercase “L” = “l” and an uppercase “i” = “I”) might still result in a technically valid checksum, so users must double-check addresses carefully.
Additionally, EIP-55 checksums don’t prevent users from sending Ether (ETH) to a valid but incorrect address, and they won’t alert users if they’ve copied an address for a different cryptocurrency by mistake, as address lengths can vary.
Ethereum addresses are hexadecimal strings of 40 characters, consisting of the letters A–F and the numbers 0–9.
Ethereum uses a checksum mechanism to enhance accuracy and reduce the likelihood of errors during transactions.
Several steps are involved in creating an Ethereum address’s checksum.
First, a lowercase version of the original address is created.
Next, the Keccak-256 hash of the lowercase address is computed using a complex cryptographic algorithm called Keccak-256, which generates a unique hash value for a given input.
Then, each character in the original address is compared with its corresponding bit in the hash.
If a character is a letter (A–F) in the original address and the matching bit in the hash is 1, the character is capitalized in the checksummed address.
This process ensures that the checksummed address has 42 characters in total and uses capital letters to add an additional layer of error protection.
By using this checksum technique, Ethereum addresses become more resistant to errors caused by typographical mistakes during transactions, greatly reducing the likelihood of funds being sent to incorrect addresses and giving Ethereum network users more security and confidence when sending and receiving cryptocurrency.
There are several benefits to using checksummed Ethereum addresses, such as enhanced security, a lower error rate, and increased transparency.
Checksummed addresses significantly reduce the likelihood of transaction failures by incorporating an error-checking feature, which minimizes the risk of unintentional loss due to typographical errors and aids in transferring funds to the correct destination.
Furthermore, by adding an extra layer of verification, checksummed addresses enhance security by helping users identify and avoid incorrect or misspelled addresses, thereby reducing the likelihood of sending funds to unwanted or malicious locations.
Checksummed addresses also promote transaction transparency by giving users confidence in knowing that their transactions are less likely to go wrong.
This boosts acceptance of cryptocurrencies and builds trust in the Ethereum network.
However, it’s important to note that a correctly checksummed address doesn’t guarantee that a corresponding account or contract actually exists on the Ethereum blockchain.
The concept of built-in type indicators addresses this issue, enhancing clarity and security on blockchains like Ethereum by integrating prefixes into addresses to instantly indicate the type of entity they represent.
For example, an address starting with “eoa_” denotes an externally owned account (a standard user’s wallet), while “sc_” signifies a smart contract.
This provides immediate clarity, reducing the likelihood of errors, such as accidentally sending funds to a smart contract instead of an individual’s wallet.
Such indicators can enhance users’ experiences with blockchain technology and may lead to wallets and interfaces incorporating security features specific to different address types.
