Ethereum: Why are Bitcoin addresses hashes of public keys?
The Bitcoin blockchain is built on Ethereum, one of the most popular decentralized applications (dApps) on the Ethereum network. A fundamental aspect of Bitcoin and Ethereum is how they generate and verify transactions and addresses. While these concepts may seem similar at first glance, there are some key differences in how each system approaches address generation.
Understanding Bitcoin Addresses
Bitcoin addresses are constructed from a public key using repeated hashing with SHA-256 and RIPEMD1 This process creates a unique identifier for each transaction. The basic idea is that the public key serves as a fingerprint or signature of the sender, and by combining it with multiple hash functions, the creator ensures the integrity and uniqueness of the address.
Why are Bitcoin addresses hashed?
In the case of Ethereum, addresses are hashes of the corresponding public keys. Here’s why:
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Security: By hashing the public key, the sender can ensure that any changes to the key (such as if a private key is lost or compromised) would significantly alter the public key, making it harder for anyone else to create an address from the new key.
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Uniqueness
: Every Ethereum address has a unique identifier based on the corresponding public key. This uniqueness ensures that there can be no duplicate addresses, which is a critical aspect of a decentralized system.
Understanding the Ethereum Use Case
Ethereum uses hashes for another reason: to maintain the integrity and authenticity of transactions across different nodes in the network. The process involves using the sender’s public key (in the form of a hash) along with their private key (or mnemonic, if any). This setup ensures that any transaction sent by a user must have been approved by all nodes in the network before it is considered valid.
Key Differences
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Purpose: Bitcoin addresses primarily serve as a form of digital currency and are designed for fast transfers. The Ethereum address system is more complex and used for a wide range of dApps.
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Security Measures: While both systems use hashing, Ethereum goes further by incorporating additional security measures such as message authentication codes (MACs) to ensure the authenticity of transactions.
Conclusion
In conclusion, Bitcoin addresses are hashes of corresponding public keys, which serve several purposes in the blockchain system. This unique approach ensures security and uniqueness on the Ethereum network. While similar concepts exist on other platforms, the integration with a wide range of decentralized applications like Ethereum makes its address hashing strategy particularly effective for these types of dApps.