Hey guys,
Anyone knows how those bitcoin exchanges can randomly generate btc address for a new signed up account? Also, a new random address can be automatically generated each time we click on deposit tab. How do they achieve that automatically?
Maths.
It's pretty easy.
- Choose a very random number from a very big set of numbers. This is the private key.
- Calculate the ECDSA public key.
- Hash the public key.
- Convert the result to base58check encoding.
That's it. That's how you generate a new bitcoin address. Most modern computers can do it in less than a thousandth of a second.
Those addresses are all generated from one online wallet?
That is an implementation detail that is up to the service provider to decide for themselves. They could store them all in one wallet, they could use multiple wallets, or they might just store each private key individually.
When user deposits real bitcoin, how does the exchange recognize those addresses are linked to a certain account, so that it can credit that account automatically?
They only gave the address to one person. Therefore, when they receive a payment at the address, they assume it is for the person who they gave the address to.
Think of a bitcoin address like an invoice number. Someone wants to send you some bitcoins for some reason. You generate an invoice number (bitcoin address) for that person for that purpose. Now when bitcoins are received with the invoice number (the address), you know what they are for.
