WEBVTT - Automatic transcript; recognition may contain errors. Reviewed for technical wording and speaker labels. Times match the published episode. 00:00:00.530 --> 00:00:02.910 Before the show, a quick word from our sponsor. 00:00:11.130 --> 00:00:13.830 Live from Utrecht, this is the Van Wirdum Sjorsnado. 00:00:14.110 --> 00:00:14.330 Hello. 00:00:14.970 --> 00:00:15.490 Hey, Sjors. 00:00:15.710 --> 00:00:15.950 What's up? 00:00:16.130 --> 00:00:19.670 The other day I wanted to send Bitcoin to someone, but I didn't. 00:00:20.150 --> 00:00:21.010 Shouldn't you hodl? 00:00:21.210 --> 00:00:26.750 I hodl all I can, but sometimes I need to eat, or I need to pay my rent, or I 00:00:26.750 --> 00:00:30.750 need to buy a new plant for my living room. 00:00:31.270 --> 00:00:31.970 Yeah, that's true. 00:00:32.130 --> 00:00:36.510 So the problem was the person I wanted to send Bitcoin to, I didn't have their IP 00:00:36.510 --> 00:00:36.930 address. 00:00:37.250 --> 00:00:38.810 You did not have their IP address. 00:00:38.890 --> 00:00:40.350 I did not have their IP address. 00:00:40.550 --> 00:00:40.630 Okay. 00:00:40.990 --> 00:00:46.450 Luckily, it turns out there's this trick in Bitcoin called Bitcoin addresses. 00:00:46.930 --> 00:00:47.530 That's right. 00:00:47.690 --> 00:00:48.450 Have you heard of this? 00:00:49.210 --> 00:00:49.690 Yes. 00:00:50.090 --> 00:00:54.530 Maybe our reader, cut that please. Maybe our listener hasn't yet, Sjors. So let's 00:00:54.530 --> 00:00:56.030 explain what Bitcoin addresses are. 00:00:56.570 --> 00:00:58.830 Okay. What are Bitcoin addresses? 00:00:59.110 --> 00:01:03.230 First of all, so I made a stupid joke about IP addresses, but this was actually 00:01:03.230 --> 00:01:04.250 an option, wasn't it? 00:01:04.450 --> 00:01:08.410 Yeah, so in the initial version of Bitcoin, Satoshi announced it on the mailing 00:01:08.410 --> 00:01:11.610 list and said, well, if you want to send somebody some coins, you just enter 00:01:11.610 --> 00:01:16.450 their IP address and then it'll exchange, I guess, an address to send it to. 00:01:16.450 --> 00:01:21.490 Yeah so it was actually possible to send bitcoins to people's IP addresses. I 00:01:21.490 --> 00:01:24.350 don't think that's possible anymore. That's not in any of the code. 00:01:24.350 --> 00:01:29.110 I don't think so either. I haven't seen it. Yeah because the other way is that 00:01:29.110 --> 00:01:32.910 you just get an address to send to and then it goes to the blockchain and because 00:01:32.910 --> 00:01:36.490 the other side is checking the blockchain also it'll show up yeah. 00:01:37.090 --> 00:01:40.270 Well, that's actually not how it works at all. But we're going to explain it now, 00:01:40.470 --> 00:01:40.950 I think. 00:01:41.410 --> 00:01:41.570 Yep. 00:01:41.930 --> 00:01:47.070 Let's go. Okay, first of all, Sjors, when you send Bitcoin to someone, what do 00:01:47.070 --> 00:01:48.090 you actually do? What happens? 00:01:48.370 --> 00:01:52.510 Well, you're creating a transaction that has a bunch of inputs and it has an 00:01:52.510 --> 00:01:56.170 output. And that output describes who can spend it. 00:01:56.410 --> 00:01:56.710 Yeah. 00:01:56.870 --> 00:02:00.830 So you could say anybody can spend this. That's not a good idea. We talked about 00:02:00.830 --> 00:02:04.870 that in an earlier episode. So what you do is you put a constraint on it. And the 00:02:04.870 --> 00:02:10.750 very first version of that constraint was he or she who has this public key 00:02:10.750 --> 00:02:14.970 can spend the coins. So that's called pay to public key. 00:02:15.530 --> 00:02:20.210 Yes, exactly. And then we just mentioned this IP example. So what actually 00:02:20.210 --> 00:02:24.730 happened was you would connect to someone's IP. I don't know the nitty gritty 00:02:24.730 --> 00:02:28.390 details, but in general, you would connect to someone's IP and you'd ask for a 00:02:28.390 --> 00:02:32.310 public key and that person would give you the public key. And I think that's what 00:02:32.310 --> 00:02:33.310 you send the bitcoins to. 00:02:33.680 --> 00:02:38.140 Yeah, I believe so too, but I haven't seen that code in action, so we could be 00:02:38.140 --> 00:02:41.720 slightly wrong there. Somebody should dig it up. I'd love to see screenshots of 00:02:41.720 --> 00:02:43.160 what that used to look like. 00:02:43.520 --> 00:02:48.120 Yeah, is there anyone who's ever used this way of paying someone pay to IP 00:02:48.120 --> 00:02:48.580 address? 00:02:49.060 --> 00:02:50.140 Yeah, we'd love to know. 00:02:50.260 --> 00:02:55.600 It was technically possible. If anyone listening... Has anyone ever actually used 00:02:55.600 --> 00:02:57.520 this? We'd be curious to hear that. 00:02:57.740 --> 00:03:01.620 I mean, it makes sense to think that way in the first version of Bitcoin, right? 00:03:01.700 --> 00:03:04.980 Because before that, you had all these peer-to-peer applications and they were 00:03:04.980 --> 00:03:09.660 generally very direct. So with Napster and all these things, or Kazaa, I don't 00:03:09.660 --> 00:03:13.380 know which one, you would connect to other people and you would download things 00:03:13.380 --> 00:03:17.620 from them. And with Bitcoin, you connect to other peers, but nowadays you just 00:03:17.620 --> 00:03:21.000 connect to random peers. But perhaps in the beginning, the idea might have been, 00:03:21.120 --> 00:03:25.040 okay, you connect to peers you know, and so then you might as well, you know, do 00:03:25.040 --> 00:03:27.880 transactions with them. But right now you don't really do transactions with the 00:03:27.880 --> 00:03:31.420 peers you're directly connected to, at least not in Bitcoin on chain. 00:03:31.780 --> 00:03:36.200 Yeah. Well, anyway, so that's one way of paying someone to a public key is you'd 00:03:36.200 --> 00:03:39.960 connect to their IP address and you'd get their public key. The other way is if 00:03:39.960 --> 00:03:44.720 you mine Bitcoins. So if you're a miner, then you're actually sending the block 00:03:44.720 --> 00:03:49.600 rewards to your public key. Is that still the case? It used to be the case in the 00:03:49.600 --> 00:03:50.400 beginning, at least. 00:03:50.680 --> 00:03:54.640 Well, in the beginning, Bitcoin had a piece of mining software built into 00:03:54.640 --> 00:03:58.080 software, right? So if you if you downloaded the Bitcoin software, it would just 00:03:58.080 --> 00:04:01.320 start mining. And so it would use that mechanism. 00:04:01.320 --> 00:04:02.840 Well, you just have to press a button, but yeah. 00:04:03.320 --> 00:04:09.260 Yeah, I guess. And then later on, you know, you had mining pools 00:04:09.260 --> 00:04:12.780 and it all became more professional. So the way they would pay out might be very 00:04:12.780 --> 00:04:18.000 different. Probably, you know, might go to a multi-sig address from which it's 00:04:18.000 --> 00:04:23.240 paid back to the individual pool participants. Or it could be paid directly to 00:04:23.240 --> 00:04:26.360 the pool participants, although that's a bit inefficient because you need a long 00:04:26.360 --> 00:04:30.160 list of addresses in the coinbase. But I've seen huge coinbase transactions, so 00:04:30.160 --> 00:04:31.820 probably people were doing that. 00:04:32.340 --> 00:04:37.490 Right. Well, anyway, so the point I was making was this pay to public key way of 00:04:37.490 --> 00:04:41.970 paying someone. I learned this while doing a little bit of research for the show. 00:04:42.110 --> 00:04:47.950 That was only ever really used for pay to IP address and for the miner, the 00:04:47.950 --> 00:04:48.510 block reward. 00:04:48.790 --> 00:04:49.230 Okay. 00:04:49.390 --> 00:04:54.420 It wasn't actually used for anything other than that. What was used? Other than 00:04:54.420 --> 00:05:00.240 that was pay to public key hash, right? So you're not sending money to a 00:05:00.240 --> 00:05:03.740 public key, but you're sending money to the hash of that public key. 00:05:04.100 --> 00:05:04.480 Yeah. 00:05:04.740 --> 00:05:06.960 And this is where addresses come in. 00:05:07.120 --> 00:05:07.560 Yeah. 00:05:07.720 --> 00:05:11.540 And this type of payment actually used addresses for the first time. Not for the 00:05:11.540 --> 00:05:14.800 first time. This was always there. Also something I learned while doing a little 00:05:14.800 --> 00:05:18.980 bit of research. This was there since day one. There were Bitcoin addresses since 00:05:18.980 --> 00:05:23.250 day one, but they were only there for pay to public key hash. 00:05:23.250 --> 00:05:29.010 Right, so basically so the script on the Bitcoin blockchain would in that 00:05:29.010 --> 00:05:34.470 case say okay the person who can spend this must have the public key belonging to 00:05:34.470 --> 00:05:39.630 this hash so you know the nice thing about that is that you're not saying which 00:05:39.630 --> 00:05:42.710 public key you have or at least at the time it was thought that maybe that was 00:05:42.710 --> 00:05:46.550 safer against quantum attacks but the other benefit is that it's a little bit 00:05:46.550 --> 00:05:50.250 shorter so it saves a bit on block space although of course that wasn't an issue 00:05:50.250 --> 00:05:53.060 back then. So yeah, you pay to the public key hash. 00:05:53.400 --> 00:05:57.480 Yeah, I guess in a way it's slightly more private as well, right? Because you're 00:05:57.480 --> 00:06:01.020 only revealing your public key when you're paying. No, that doesn't make sense. 00:06:01.220 --> 00:06:03.460 No, I think that exactly doesn't matter. 00:06:03.760 --> 00:06:09.480 No. Okay, so that's paying to public key hash. And like you said, what you see 00:06:09.480 --> 00:06:15.080 on the blockchain itself, what's recorded on the blockchain, is the actual hash 00:06:15.080 --> 00:06:19.840 of a public key. However, when you're getting paid on a public... 00:06:20.610 --> 00:06:26.430 pay to pub key hash, what you're sharing with someone is not this hash; 00:06:26.430 --> 00:06:27.710 it's actually an address. 00:06:27.840 --> 00:06:33.000 Yes, well you are sharing the hash but you do that using an address. 00:06:33.000 --> 00:06:34.700 Exactly, so what is an address? 00:06:34.700 --> 00:06:39.300 So an address essentially is at least this type of address is the number one 00:06:39.300 --> 00:06:44.280 followed by the hash of the public key but it is encoded using something called 00:06:44.280 --> 00:06:45.540 base 58. 00:06:45.540 --> 00:06:46.840 What's base 58? 00:06:46.840 --> 00:06:52.680 Okay, so let's go back to base 64. I don't know if you've ever seen 00:06:52.680 --> 00:06:57.720 an email source code, like an attachment, all these weird characters in there. 00:06:58.390 --> 00:07:04.230 That's base 64. And base 58 is based on that. But maybe to say what it is, it is 00:07:04.230 --> 00:07:09.830 all the lowercase letters, all the uppercase letters, and all the numbers, and 00:07:09.830 --> 00:07:13.310 without any of the signs, and with some ambiguous things removed. So you do not 00:07:13.310 --> 00:07:16.070 have the small O, the big O, and the zero. 00:07:16.530 --> 00:07:17.990 Should we start with base 10? 00:07:18.780 --> 00:07:21.200 Yeah. So, I mean, there's two things. 00:07:21.360 --> 00:07:24.420 I want people to understand what base means. 00:07:24.600 --> 00:07:27.940 Yeah, exactly. So this is what's in base 58, but then the question is, what is base? 00:07:28.100 --> 00:07:28.340 Yes. 00:07:28.760 --> 00:07:33.580 And so base 10 is you have 10 fingers. And so if you want to express, say, the 00:07:33.580 --> 00:07:39.500 number 115, you can make three gestures, right? You show a 1 and a 1 and a 5. 00:07:40.040 --> 00:07:45.740 And that is base 10 because you're using your 10 fingers three times. And that's 00:07:45.740 --> 00:07:49.380 also how you write down numbers. But there have been different bases. I think the 00:07:49.380 --> 00:07:53.540 Babylonians were very much into base 360. That's why we have… 00:07:53.540 --> 00:07:57.240 Hang on, hang on. Because we're not actually using fingers most of the time. So I 00:07:57.240 --> 00:08:02.020 want to make this clear that it just means we have a decimal system. So that 00:08:02.020 --> 00:08:06.700 means we have 10 different symbols that represent the number. 00:08:06.960 --> 00:08:07.580 That's right. 00:08:08.480 --> 00:08:11.540 The symbol zero, which is a round thing, and then we have the one. 00:08:11.780 --> 00:08:14.020 But it's probably not a coincidence that that happens to [unclear]… 00:08:14.020 --> 00:08:17.560 I totally agree. I just want to make it clear that we're not actually using 00:08:17.560 --> 00:08:18.620 fingers most of the time. 00:08:19.000 --> 00:08:19.880 No, and so the… 00:08:19.880 --> 00:08:24.220 Okay, so we have 10 symbols, so that means that once you get by the 11th number, 00:08:24.400 --> 00:08:28.860 at that point, you're going to have to reuse symbols you've already used, or 00:08:28.860 --> 00:08:33.520 you're now going to use combinations. So in our case, that would be... Well, it's 00:08:33.520 --> 00:08:37.160 going to get confusing because the first number is a zero. So then the 11th 00:08:37.160 --> 00:08:38.560 number is the 1 and the 0. 00:08:39.220 --> 00:08:43.480 Yeah, exactly. And there have been different bases in use, right? So base 360, I 00:08:43.480 --> 00:08:49.040 believe, was used by Babylonians, or maybe base 60. And then for computers, we 00:08:49.040 --> 00:08:54.060 tend to use base 2 internally, because chips are either on or off. So it's a 0 or 00:08:54.060 --> 00:08:59.400 a 1, so a long series of 0s and 1s. And you can express any number of that. Now, 00:08:59.520 --> 00:09:04.700 in order to read machine code, typically you would use hexadecimal, which is base 00:09:04.700 --> 00:09:09.060 16. So that is 0 to 9 and then A to F. 00:09:09.720 --> 00:09:10.320 Yeah. 00:09:11.520 --> 00:09:16.120 Right, and so base 58 is basically this 58 possible characters to express 00:09:16.120 --> 00:09:16.680 something with. 00:09:17.000 --> 00:09:21.140 Yeah, it's it's all it's all numbers and there's different ways of expressing a 00:09:21.140 --> 00:09:27.500 number based on your base. Yeah, and that determines how many symbols you're using. 00:09:28.160 --> 00:09:32.880 The trade-off here is readability, really, because you could represent machine 00:09:32.880 --> 00:09:38.680 code as normal characters. So the ASCII alphabet or the 00:09:38.680 --> 00:09:43.840 ASCII character set is 256 different characters. So that's base 256. But if 00:09:43.840 --> 00:09:48.840 you've ever done something like print and then the name of a file, your computer 00:09:48.840 --> 00:09:52.620 will show complete gibberish on the screen and it will start beeping. And the 00:09:52.620 --> 00:09:56.520 reason it starts beeping is because one of these... codes somewhere in the base 00:09:56.520 --> 00:10:00.640 256 is a beep which actually makes your terminal beep so it is completely 00:10:00.640 --> 00:10:04.880 impractical to view a file using base 256 even though there is a character for 00:10:04.880 --> 00:10:09.320 every of the 256 things there so that's why you tend to do that in base 16 00:10:09.320 --> 00:10:13.740 hexadecimal is relatively easy to read but then it's quite long if you take a 00:10:13.740 --> 00:10:17.220 public key and you write it as hexadecimal it's it's a rather long thing to write 00:10:17.220 --> 00:10:22.120 down but and base 58 is a little bit shorter so maybe you know it's easier to 00:10:22.120 --> 00:10:27.430 copy paste perhaps or it's not even easy to read on the phone. Base 58 is pretty 00:10:27.430 --> 00:10:30.090 terrible because it's uppercase, lowercase, uppercase, lowercase. 00:10:30.780 --> 00:10:36.640 Yeah. Okay. Just to restate that briefly. So base two is just, 00:10:36.740 --> 00:10:41.000 you're just using two symbols, which is one and zero. And base 10 is what we use 00:10:41.000 --> 00:10:45.840 most of the time. It's zero, one, two, three, four, up until nine. Then you have 00:10:45.840 --> 00:10:51.780 hexadecimal, which uses zero through nine plus A, B, C, D, E, F. And 00:10:51.780 --> 00:10:56.160 then what we're talking about here is base 58, which uses 58 different symbols, 00:10:56.300 --> 00:10:59.540 which are zero through nine. 00:11:00.960 --> 00:11:06.900 Most of the alphabet in both capital letters and undercase, right? 00:11:07.180 --> 00:11:11.220 Yeah, I think it's lowercase and uppercase and then most of the numbers, but 00:11:11.220 --> 00:11:14.320 there are some letters and numbers that are skipped that are ambiguous. So the 00:11:14.320 --> 00:11:19.220 number zero, the letter O, both lowercase and uppercase, or at least uppercase is not in there. 00:11:19.800 --> 00:11:25.440 Yeah, I think, for example, the capital I and the lowercase L are both not in 00:11:25.440 --> 00:11:26.820 there because they look too similar. 00:11:26.940 --> 00:11:30.320 Right, and that's why you get a little bit less than, you know, if you just add 00:11:30.320 --> 00:11:34.440 26 letters plus 26 uppercase plus 10 numbers, right? 00:11:34.740 --> 00:11:37.560 Okay, I think we finally explained what base 58 means. 00:11:37.580 --> 00:11:41.860 Yeah, and just as a sidestep, I talked about email earlier, that's base 64. That 00:11:41.860 --> 00:11:46.560 is the same, but it also has some characters like underscore and plus and equals. 00:11:46.960 --> 00:11:50.740 And that was mostly used for email attachments. And I guess they didn't want to 00:11:50.740 --> 00:11:53.780 use all 256 characters either because they didn't want the email to start 00:11:53.780 --> 00:11:57.440 beeping, but they did want to squeeze a lot of information into the attachment. 00:11:58.170 --> 00:12:02.570 Okay, that's base 58. Now, why are we talking about this? What is an address? 00:12:03.010 --> 00:12:09.010 Yeah, so the address again is actually the value 0, I believe, but that's 00:12:09.010 --> 00:12:12.350 expressed as a 1, because that's the first digit in this character set. 00:12:12.350 --> 00:12:13.610 Base 58 system, yeah. 00:12:13.790 --> 00:12:18.330 Yeah, so it starts with a 1, and then it's followed by the public key hash, which 00:12:18.330 --> 00:12:19.750 is just expressed in base 58. 00:12:20.070 --> 00:12:21.390 Right, is that all it is? 00:12:22.080 --> 00:12:26.800 Yes. And keep in mind, so that is the information you send to somebody else when 00:12:26.800 --> 00:12:31.780 you want them to send you Bitcoin. You could also just send them 00 and then the 00:12:31.780 --> 00:12:35.940 public key. And maybe they would be able to interpret that. Probably not. You 00:12:35.940 --> 00:12:40.000 could send them the actual script that's used on the blockchain. Because on the 00:12:40.000 --> 00:12:44.940 blockchain, there is no base 58 or base 64 or anything like that. The blockchain 00:12:44.940 --> 00:12:50.340 is just binary information. So the blockchain has this script that says if the 00:12:50.340 --> 00:12:55.110 person has the right public key hash, has the public key belonging to this public 00:12:55.110 --> 00:12:59.100 key hash, then you can spend it. And we talked about in an earlier episode how 00:12:59.100 --> 00:13:02.160 Bitcoin scripts work. So you could send somebody the Bitcoin script in 00:13:02.160 --> 00:13:05.700 hexadecimal, anything you want. But the convention is you use this address 00:13:05.700 --> 00:13:10.000 format. And that's why all traditional Bitcoin addresses start with a one. And 00:13:10.000 --> 00:13:11.420 they're all the same, roughly the same length. 00:13:11.560 --> 00:13:17.460 Okay, so a Bitcoin address is basically just a base 58 representation of 00:13:17.460 --> 00:13:23.280 a version number plus a public key hash. Sjors, is base 00:13:23.280 --> 00:13:26.060 58 used for anything else in Bitcoin? 00:13:26.650 --> 00:13:31.100 Yeah, you can also use it to communicate a private key. And in that case, your 00:13:31.100 --> 00:13:35.840 version number is, well, it's written as 5. But it actually represents, I think, 00:13:35.920 --> 00:13:36.480 128. 00:13:36.920 --> 00:13:37.280 Right. 00:13:37.420 --> 00:13:39.200 And then followed by the private key. 00:13:39.620 --> 00:13:45.100 So that's why all private keys start with a 5. Or at least used to start with a 5. 00:13:45.140 --> 00:13:48.620 Yeah, so in the old days you had paper wallets that you could print. And if you 00:13:48.620 --> 00:13:53.180 generate them actually securely without a backdoor, then on one side of the piece 00:13:53.180 --> 00:13:56.380 of paper you would have something starting with a 5. And on the other side of the 00:13:56.380 --> 00:13:59.430 paper you would have something starting with a 1. And then it would say, like, 00:13:59.550 --> 00:14:01.670 show this to other people and don't show this to other people. 00:14:01.910 --> 00:14:07.630 Right. Now, I happen to know, Sjors, that there are also addresses that start 00:14:07.630 --> 00:14:08.370 with a three. 00:14:08.610 --> 00:14:09.230 That's right. 00:14:09.490 --> 00:14:10.330 What's up with that? 00:14:10.870 --> 00:14:14.410 Well, usually those are multi-signature addresses, but they don't have to be. 00:14:14.530 --> 00:14:17.670 They could be single-signature addresses. What they are are... 00:14:17.670 --> 00:14:22.450 They could also be types of SegWit addresses or... They could be many things, right? 00:14:22.750 --> 00:14:23.070 Yes. 00:14:23.470 --> 00:14:27.740 They could also be... Single sig, but you already mentioned that. So let's go on. 00:14:27.880 --> 00:14:30.020 Okay, three. What does it mean? 00:14:30.360 --> 00:14:35.300 So it basically says pay to public key hash. So it is that number followed by… 00:14:33.780 --> 00:14:35.720 Pay to public script hash. 00:14:36.140 --> 00:14:39.580 Sorry, public script hash. Well, not even public, just pay to script hash. 00:14:40.540 --> 00:14:43.520 We're getting there eventually. Pay to script hash. 00:14:43.700 --> 00:14:49.280 Yes, and it says basically anybody who has the script belonging to this hash. 00:14:49.740 --> 00:14:53.380 And who can satisfy the script. So just knowing the script is not enough you 00:14:53.380 --> 00:14:55.440 actually have to do whatever the script says you should do. 00:14:55.540 --> 00:15:01.540 Yeah so the first version we just described was pay to public key hash which 00:15:01.540 --> 00:15:06.760 required people to offer a valid signature corresponding to the public key and 00:15:06.760 --> 00:15:11.940 now we're talking about pay to script hash which means someone needs to present 00:15:11.940 --> 00:15:16.420 the script and be able to solve the script. So why do these start with a three? 00:15:16.420 --> 00:15:22.290 This is a convention, so as we said, there is a... Basically, a version number 00:15:22.290 --> 00:15:27.470 that everything that you communicate through Base58 starts with a version number. 00:15:27.670 --> 00:15:31.270 And if it starts with a 1, then you know it's paid public key hash. If it starts 00:15:31.270 --> 00:15:34.690 with a 3, you know it's paid script hash. If it starts with a 5, you know it's a 00:15:34.690 --> 00:15:38.890 private key. So it's just a convention, and it has no meaning on the blockchain itself. 00:15:39.030 --> 00:15:44.270 Once again, all this is is a version number plus this hash 00:15:44.270 --> 00:15:47.310 represented in Base58. Is that all it is? 00:15:47.470 --> 00:15:47.790 Yeah. 00:15:48.150 --> 00:15:52.010 This is all. So much simpler than I once thought Sjors. 00:15:52.390 --> 00:15:55.930 No, it's really simple. And the only mystery that has been solved today, I guess, 00:15:56.070 --> 00:16:00.870 is, well, what if you only use the public key, but that wasn't done using this 00:16:00.870 --> 00:16:05.290 system. So there is no initial letter that would represent trying to do that. 00:16:06.120 --> 00:16:07.980 Yeah that was never represented. 00:16:07.980 --> 00:16:11.920 Otherwise… otherwise probably that would have been version zero, and then all 00:16:11.920 --> 00:16:14.100 normal addresses might have started with the two. Who knows? 00:16:14.100 --> 00:16:18.560 Okay I think for anyone who already knew this which is probably a good chunk of 00:16:18.560 --> 00:16:23.980 people this is a very boring episode so far but I think it's gonna get better 00:16:23.980 --> 00:16:29.740 because oh my god because Sjors, we now have a new type of address since 00:16:29.740 --> 00:16:34.080 I don't know a year or two which starts with bc1 00:16:35.560 --> 00:16:36.860 BC1Q even, usually. 00:16:37.160 --> 00:16:40.100 Yeah, usually, but not always. And we're getting into that, I think. 00:16:40.580 --> 00:16:40.720 Yep. 00:16:41.020 --> 00:16:42.580 So what is this all about? 00:16:42.660 --> 00:16:47.980 Well, that is Bech32 or Bech32 or however you want to pronounce it. And it's been 00:16:47.980 --> 00:16:53.150 used since SegWit, basically. And again, it is something that doesn't exist on 00:16:53.150 --> 00:16:57.530 the blockchain. So it's just a convention that wallets can use. This is a, as the 00:16:57.530 --> 00:17:02.830 name suggests, a Base32 system, which means you have almost all the letters 00:17:03.630 --> 00:17:09.590 and almost all the numbers minus some ambiguous characters that you don't want to 00:17:09.590 --> 00:17:11.990 have because they look too much like numbers or letters. 00:17:12.510 --> 00:17:16.370 Yeah, and I think one of the big differences compared to base 58 is that this 00:17:16.370 --> 00:17:21.500 time there are no longer... uppercase and lowercase letters there's just any… 00:17:21.500 --> 00:17:23.340 every letter is only in there once. 00:17:23.340 --> 00:17:26.500 Exactly. The other difference is that it has a benefit… 00:17:26.500 --> 00:17:31.080 I'll mention one benefit of that which is that if you want to read an address out 00:17:31.080 --> 00:17:35.300 loud it's going to be a little bit easier now that there's no difference between 00:17:35.300 --> 00:17:36.520 uppercase and lowercase. 00:17:36.520 --> 00:17:41.280 Yeah and the other difference is, I didn't check with base 58 but basically it 00:17:41.280 --> 00:17:45.420 doesn't start with zero or anything like that it's it looks pretty arbitrary so 00:17:45.840 --> 00:17:51.680 The value 0 is written as a Q. The value 1 is written as a P. The value 2 00:17:51.680 --> 00:17:53.340 is written as a Z, etc. 00:17:53.740 --> 00:17:55.980 Why is the value 1 just written as a 1? 00:17:56.180 --> 00:18:00.880 Well, it's completely arbitrary, first of all, right? You can connect any value 00:18:00.880 --> 00:18:02.060 to any symbol you want. 00:18:02.180 --> 00:18:02.400 Sure. 00:18:03.360 --> 00:18:07.340 If there is a human interpretation that depends on it, then you don't want to do 00:18:07.340 --> 00:18:13.260 anything confusing. But if your only goal is to make it easy to copy-paste 00:18:13.260 --> 00:18:18.360 things, and if your other goal is for every address to start with bc1q, 00:18:18.920 --> 00:18:24.560 because bc1 sounds cool, then maybe there's a reason why you want to do them out 00:18:24.560 --> 00:18:28.260 of order. I haven't read what the rationale is in the order. 00:18:28.660 --> 00:18:30.580 Okay, now Bech32. 00:18:30.900 --> 00:18:36.280 Yeah, so there's a set of 32 characters, and… that means you're… but it's doing 00:18:36.280 --> 00:18:42.160 the same thing, right? It's again saying, okay, here's a pay to public key. Yeah, 00:18:42.240 --> 00:18:45.280 a pay to public key address. In this case, a pay to witness public key because 00:18:45.280 --> 00:18:50.970 it's using SegWit, but it's the same idea, public key hash. So it 00:18:50.970 --> 00:18:56.010 says, hello, and then followed by the hash of the public key. 00:18:56.370 --> 00:18:59.970 Okay, so Bech32 addresses, what are we looking at exactly? Because what we're 00:18:59.970 --> 00:19:05.390 seeing for each address, it starts with B, C, 1, and then usually a Q, and then 00:19:05.390 --> 00:19:08.890 a whole bunch of other symbols. So what does this all mean? 00:19:09.170 --> 00:19:14.070 That's right. So there is something called the human readable part. And that 00:19:14.070 --> 00:19:18.110 doesn't really have any meaning other than that humans can recognize, okay, if 00:19:18.110 --> 00:19:21.030 the address starts with BC, then it refers to Bitcoin. And the software, of 00:19:21.030 --> 00:19:23.730 course, can see this too, but both humans and software can understand this. 00:19:24.070 --> 00:19:29.410 Yeah, so if Litecoin would want to use these kinds of addresses, maybe they do 00:19:29.410 --> 00:19:30.130 actually, I don't know. 00:19:30.230 --> 00:19:31.690 Probably, then they might start with LT. 00:19:32.010 --> 00:19:36.470 Exactly. So these first two letters just refer to which currency is this about? 00:19:36.630 --> 00:19:37.650 What blockchain is this for? 00:19:37.810 --> 00:19:42.140 Yeah, and it can be, I think, a fairly arbitrary number of letters. The idea is 00:19:42.140 --> 00:19:43.340 that it's separated by a one. 00:19:43.480 --> 00:19:45.120 Oh, it could be more than two letters as well? 00:19:45.460 --> 00:19:49.620 Yeah, I think initially Bitcoin Cash was using a much longer introduction. 00:19:49.880 --> 00:19:50.400 I see, okay. 00:19:50.620 --> 00:19:53.980 So that's pretty arbitrary. Obviously, you want to conserve space. So BC is nice 00:19:53.980 --> 00:19:59.420 and short. And a one, that's a separator, has no value. So if you look at what do 00:19:59.420 --> 00:20:02.220 all the 32 numbers mean, then one is not in it. 00:20:02.500 --> 00:20:03.880 One just means… 00:20:03.880 --> 00:20:04.480 Skip this. 00:20:04.880 --> 00:20:09.680 The human readable part is over. Now the fun stuff starts. 00:20:09.820 --> 00:20:10.420 Now the meat and potatoes. 00:20:10.700 --> 00:20:10.820 Right. 00:20:10.920 --> 00:20:14.340 And the fun stuff, it's a little bit easier, actually, than with Base58, because 00:20:14.340 --> 00:20:19.600 there's a convention that says if it's... Well, the convention is it starts with 00:20:19.600 --> 00:20:24.990 the SegWit version. So the first version of SegWit is 0, which in Bech32 is 00:20:24.990 --> 00:20:30.630 written as Q. And then it's either followed by 20 bytes or 32 bytes. 00:20:31.650 --> 00:20:36.170 And that is… then it means either it's the public key hash, or it is the script 00:20:36.170 --> 00:20:41.430 hash. And they're different lengths now because SegWit uses the SHA-256 hash of 00:20:41.430 --> 00:20:47.360 the script rather than the RIPEMD 160 hash of the script. So in 00:20:47.360 --> 00:20:52.760 Base58, the script hash is the same length as the public key hash, but in 00:20:52.760 --> 00:20:57.680 SegWit, they're not the same length. So simply by looking at how long the address 00:20:57.680 --> 00:21:00.800 is, you know whether you're paying to a script or you're paying to a public key 00:21:00.800 --> 00:21:01.940 hash, so we don't have to say it. 00:21:02.140 --> 00:21:07.220 Right, so to reiterate the first two letters, PC, that just means this is about 00:21:07.220 --> 00:21:11.820 Bitcoin. Then the one says, okay, that was the… part telling you which currency 00:21:11.820 --> 00:21:16.300 this is, now pay attention to what you're actually going to pay money to. Then 00:21:16.300 --> 00:21:21.640 the Q means which version is going to follow, which version of address. 00:21:22.060 --> 00:21:22.240 Yep. 00:21:22.700 --> 00:21:24.140 And then what comes after that? 00:21:24.220 --> 00:21:24.860 Which version of SegWit. 00:21:25.120 --> 00:21:30.180 Yeah, what comes after it is actually the Bech32 representation of this hash. 00:21:30.740 --> 00:21:33.900 Which is either pay to public key hash or pay to script hash. 00:21:34.220 --> 00:21:38.260 Yeah, exactly. Or pay to witness public key hash or pay to witness script hash. 00:21:38.680 --> 00:21:41.460 Sjors, is there anything else cool about Bech32? 00:21:41.800 --> 00:21:47.320 Yeah, there is. And it's about error correction. So in base 58, there is a 00:21:47.320 --> 00:21:51.980 checksum. So a checksum basically means you add something to the address at the 00:21:51.980 --> 00:21:57.940 end. And that way, if you make a typo... then that checksum at 00:21:57.940 --> 00:21:59.920 the end of the address is not going to work. 00:22:00.400 --> 00:22:02.540 [unclear] going to compute with the rest of the address. 00:22:02.740 --> 00:22:04.300 So it'll tell you, okay, this address is wrong. 00:22:04.660 --> 00:22:04.780 Right. 00:22:04.920 --> 00:22:06.080 Now there is a certain chance… 00:22:06.120 --> 00:22:09.860 It doesn't tell you what the correct version would be. It just tells you this is wrong. 00:22:10.240 --> 00:22:14.100 Exactly. Now there is, you know, there's a chance that you make a typo that 00:22:14.100 --> 00:22:17.600 happens to have a correct checksum. I don't know what the odds are with base 00:22:17.600 --> 00:22:18.440 [unclear]. They're pretty low. 00:22:19.320 --> 00:22:21.180 You'd probably have to make several typos. 00:22:21.410 --> 00:22:25.050 Well, yeah, you'd have to have the unlucky typo. I don't know if the odds are 1 00:22:25.050 --> 00:22:26.770 in 10,000 or 100,000 or something. 00:22:27.090 --> 00:22:27.210 Right. 00:22:27.430 --> 00:22:32.630 But, you know, there's a lot of Bitcoin users. But in Bech32, it's actually 00:22:32.630 --> 00:22:36.390 better because it will not just tell you that there's a typo. It'll tell you 00:22:36.390 --> 00:22:42.300 where the typo is. And that's done differently. So where we 00:22:42.300 --> 00:22:47.210 talked about in the Base 58 system, there is a checksum, which just... takes all 00:22:47.210 --> 00:22:51.250 the bytes, basically takes all the bytes from the address and then hashes it. 00:22:51.950 --> 00:22:56.830 Here there is very sophisticated mathematical magic. I don't think it's super 00:22:56.830 --> 00:23:01.250 sophisticated, but I can't explain what the actual magic is. But the magic makes 00:23:01.250 --> 00:23:03.970 it so that you can actually make a typo and it'll actually tell you where the 00:23:03.970 --> 00:23:08.110 typo is. And you can make about four typos and it'll still know where the typo is 00:23:08.110 --> 00:23:13.330 and what the real value is. If you do more than that, it won't. And the analogy I 00:23:13.330 --> 00:23:19.230 like to make with that... as someone once told me is it's like if you have a wall 00:23:19.230 --> 00:23:24.250 and you draw a bunch of circles on it and each circle represents a correct value 00:23:24.250 --> 00:23:28.870 and you're throwing a dart at it and you know you might hit the bullseye then you 00:23:28.870 --> 00:23:32.310 have the right value or you might just slightly miss the bullseye but you're 00:23:32.310 --> 00:23:36.810 still within that big circle then you know you know you know exactly where it 00:23:36.810 --> 00:23:37.290 should have been. 00:23:37.290 --> 00:23:39.150 Are you talking about interlocking circles? 00:23:39.690 --> 00:23:40.850 No, they're not overlapping. 00:23:41.190 --> 00:23:41.310 Okay. 00:23:41.590 --> 00:23:46.450 So the idea there is you want the circles to be as big as possible, obviously, 00:23:46.750 --> 00:23:50.490 but you don't want to waste any space. So that's an optimization problem in 00:23:50.490 --> 00:23:55.890 general. And of course, in the example of a two-dimensional wall with 00:23:55.890 --> 00:23:59.330 two-dimensional circles, it's pretty simple to visualize, right? You throw the 00:23:59.330 --> 00:24:02.590 dart and you see, okay, it's still within the big circle, so it should belong to 00:24:02.590 --> 00:24:06.590 this dot. So that is like saying, okay, here's your typo and this is how you fix it. 00:24:06.790 --> 00:24:07.090 Right. 00:24:07.690 --> 00:24:12.610 But, and in the case of Bech32, the way I think you should imagine it is that 00:24:12.610 --> 00:24:16.510 instead of a two-dimensional wall, you have a 32-dimensional wall, and the 00:24:16.510 --> 00:24:19.310 circles are also probably 32-dimensional hyperspheres. 00:24:19.390 --> 00:24:23.510 I find that a little bit hard to imagine, Sjors, but I'm not a wizard like you. 00:24:24.230 --> 00:24:28.690 Well, if you've studied something like physics or math, you know that anything 00:24:28.690 --> 00:24:31.710 you can do in two dimensions, you know, you can see it in three dimensions, and 00:24:31.710 --> 00:24:35.440 you can do it in n dimensions, you can abstract all these things out too… to as 00:24:35.440 --> 00:24:40.440 many dimensions as you need. But the general intuition is the same. So now you're 00:24:40.440 --> 00:24:44.240 hitting your keyboard, and somewhere in that 32-dimensional space, you're 00:24:44.240 --> 00:24:48.520