Before starting of with the Features of Crypto Wallet, just to refresh our memory, we discussed about the features of Bitcoin in the last session, and now in this session, we delve deeper into the working of Bitcoins with respect to Address Creation, Address Display and Account creation as a part of Features of Crypto Wallet.
Topics Covered in the session
Features of Crypto Wallet – Address Creation
In the Features of Crypto Wallet, creating new Bitcoin addresses is an offline operation and involves creating a public and private key pair. You can do this, if you like, using dice. This is different from any other account creation process where you have to ask a third party to create an account for you, for example asking your bank or Facebook to assign you an account.
- Step 1: Generate some randomness and use it to pick a number from 1 to 2256-1. This is your private key.
- Step 2: Do some maths on it to generate a public key.
- Step 3: Hash your public key twice to create your Bitcoin address.
- Step 4: Save the private key and its corresponding address.
So you assign yourself an address without asking or checking with anyone to see if it has already been taken. This sounds scary. What if someone else has already chosen your private key? The short answer is that this is extremely unlikely. 2256 is a big number, 78 digits long, and you can pick any number up to that. Your chance of winning the UK lottery is 1 in 13,983,816—which only has eight digits. A number with seventy-eight digits is astronomically large. In theory, someone could deliberately generate millions or billions of accounts per second and check them for coins to steal, but the number of valid accounts is so humongous that they’d be doing it forever before finding a single account that has been used before. In practice, however, weaknesses can exist, and they rely on exploiting flaws in the random number generation for the private keys.
Features of Crypto Wallet – Address Display
When someone wants to send you bitcoins, you need to tell them your address—like telling someone your bank account number so they can send you money. There are a few ways to do this. In Features of Crypto Wallet one popular way is by showing it as a QR code. QR codes are not magic. They are just text, encoded in a visual way that makes it easy for QR code scanners to read the code and convert it back into text.
Features of Crypto Wallet – Account Balance
In the Features of Crypto Wallet, one needs to access an up-to-date version of the blockchain in order to be aware of all the transactions going in and out of the addresses it is keeping tabs on. The wallet, software can do this by either storing the entire blockchain and keeping it up to date (this is called a full node wallet) or by connecting to a node elsewhere which does the heavy lifting (this is called a lightweight wallet). In Features of Crypto Wallet, a full node wallet would contain over a hundred gigabytes of data and would need to be constantly connected over the internet to other Bitcoin nodes. So in many cases, especially on mobile phones, this is not practical so the wallet software is lightweight and connects to a server that hosts the blockchain.
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