Base58 Encoding in Bitcoin

Base58 is a binary-to-text encoding scheme used in Bitcoin to represent data (e.g., addresses) with fewer symbols, avoiding visually ambiguous characters. It is derived from Base64 but removes the following characters:
0 (zero), O (uppercase o), l (lowercase L), I (uppercase i), +, and /.

Key Steps in Base58 Encoding

1. Add a Prefix

  • A prefix (version byte) is prepended to the data to identify its type.
    Common prefixes include:
    • 0x00 for Pay-to-Public-Key-Hash (P2PKH) addresses.
    • 0x05 for Pay-to-Script-Hash (P2SH) addresses.

2. Compute Checksum

  1. Hash the prefix + payload twice using SHA256: hash = SHA256(SHA256(prefix + payload))

  2. Take the first 4 bytes of the resulting 32-byte hash. This serves as the checksum.

3. Concatenate Components

Combine the prefix, payload, and checksum into a single byte sequence: final_data = prefix + payload + checksum

4. Base58 Encode

Encode the final_data using Base58 encoding.

  • Base58 alphabet: 123456789ABCDEFGHJKLMNPQRSTUVWXYZabcdefghijkmnopqrstuvwxyz

Example Structure

For a P2PKH address: [0x00 (1 byte)] + [Public Key Hash (20 bytes)] + [Checksum (4 bytes)]

Why Use Base58?

  • User-friendly: Removes ambiguous characters to prevent errors in manual entry.
  • Error detection: The checksum allows validation of data integrity.
  • Compact representation: Encodes data in fewer characters than hexadecimal.

Summary

Bitcoin uses Base58Check encoding (Base58 with checksum) for addresses:

  1. Add a prefix to identify data type.
  2. Compute a checksum via double SHA256 hashing.
  3. Combine and encode in Base58.

Challenge

1.Given a base58 tprv, extract the private key and chaincode