Crypto Core Education

What is a checksum in a crypto address?

A checksum in a crypto address is a small piece of data built into the address that lets software detect typos before a transaction is sent. It is derived by hashing part of the address and embedding a few resulting characters, so if you mistype a digit, the checksum no longer matches and the wallet rejects the address. This guards against sending funds to an unintended destination caused by a copy error. For example, Bitcoin and Ethereum addresses use checksum encoding, which is why a single wrong character usually triggers an invalid-address warning rather than a silent loss.