Address

In the world of blockchain, think of addresses as special codes that let you send or receive digital money and collectibles, like tokens and unique digital art known as NFTs. Imagine these addresses as your digital mailbox for cryptocurrencies and collectibles, where each address is a unique string of text created to keep your digital transactions secure.

How Blockchain Addresses Work

Blockchain addresses work a bit like your email address but for digital currencies and collectibles. They are created using secure methods to uniquely identify a user's account or a digital contract on the blockchain. This unique code is used to access the details of a digital wallet, which is like your personal safe for digital assets like tokens and NFTs.

You're in control of this digital wallet through something called private keys, secret codes that prove you own the wallet. Private keys generated by users are usually converted to seed phrases (string of unique words) that grant you access to your wallet on the blockchain.

Examples of Blockchain Addresses

To give you an idea, here are examples of blockchain addresses on different platforms:

Bitcoin Address: 12tkqA9xSoowkzoERHMWNKsTey55YEBqkv

Ethereum Address: 0xc02aaa39b223fe8d0a0e5c4f27ead9083c756cc2

Things get interesting when it comes to Internet Computer Protocol (ICP) addresses

ICP introduces two specific types of addresses: Principal IDs and Legacy Addresses.

The main type of address or account is known as Principal which represents entities that can interact with Internet computer blockchain such as users, nodes, canister smart contracts, etc.

1. Principal - Which is the main unique ID generated by users or Canisters on ICP
2. Legacy Address / Account Addresses - derived from Principal ID, is used for transactions on a token ledger.

Principal ID: Principal ID can be thought of as an unique ID assigned to a principal (an entity/principal) which can be used to authenticate, verify or sign access to resources or other users.

For users, it's linked to a public key, a piece of secure code that helps verify your identity. Canister Smart Contracts have their own sequence of IDs, allowing them to interact within the blockchain without needing manual approval.

Example of a Principal ID: nfxu4-cn7qt-x7r3c-5dhnk-dcrct-gmgoz-67gcg-5glvc-2krhv-gcmsr-qqe

Legacy Address (Account ID): This comes from the Principal ID and is mainly used for transactions, like sending or receiving ICP tokens, the digital currency of ICP. You can think of it as your Principal ID's account number for digital transactions within the ICP ecosystem.

Example of a Legacy Address: c19748cd2fd01ab1f87d0831bcd622b0ed5391267773b72322165798ca7a116a

To simplify:

• Principal ID is your unique identifier on the ICP, proving your identity for secure transactions.
• Legacy Address acts as your account for engaging in digital transactions on the ICP. It is generated from the Principal ID.

Why It Matters

Principal IDs and Legacy Addresses on ICP are crucial for keeping your transactions secure and proving they really come from you, thanks to the combination of the ID and your private key.

While smart contracts operate automatically under the blockchain's rules, users interact with these addresses to manage their digital assets securely and privately.

Key Takeaways

• Principal IDs are unique identifiers for entities on the ICP, secured by private keys for authentication.
• Legacy Addresses are used for ICP token transactions, derived from Principal IDs using cryptographic methods.
• A single Principal ID can be associated with multiple account addresses, but each account address is linked to one Principal ID only.