Have you ever wondered if a Bitcoin (BTC) address (or string of 26-35 alphanumeric characters) might happen to contain human-readable words instead of random letters?
You may have heard of the Lightning Network, which allows you to create a fancy BTC address that looks like an email or web domain. But there is also a way to create bitcoin addresses that contain human-readable words on the original bitcoin blockchain. Such addresses are known as vanity bitcoin addresses.
What is a Vanity Bitcoin Address?
A vanity bitcoin address is a personalized BTC address that contains a specific pattern or word as part of a string of 26-35 letters and numbers. Unlike usual bitcoin addresses (which consist of random characters), vanity bitcoin addresses allow users to customize their addresses and even send specific messages within the address.
The word “vanity address” comes from the simple meaning of the word “vanity” and is used to express an exaggerated pride in oneself or one’s appearance. Consistent with the immediate meaning, vanity addresses are used by those who want to stand out and give their wallet addresses a unique identity.
Vanity bitcoin addresses became popular a few years after anonymous bitcoin creator Satoshi Nakamoto launched the cryptocurrency in 2009.The first vanity address generator called “VanityGen” was freed 2012 as an open source platform on GitHub. One of the first references to vanity addresses on Bitcointalk.org (a major cryptocurrency forum created by Satoshi Nakamoto). go Back to 2013.
Josef Tetek, a bitcoin analyst at Trezor, said Satoshi did not use vanity addresses: “He disappeared from the public before vanity addresses became popular,” Tetek told Cointelegraph, referring to Satoshi’s disappearance in 2011.
In addition to the Bitcoin blockchain, vanity addresses can also be used on other networks, including the Ethereum blockchain. Unlike Bitcoin unique addresses, which allow users to choose between 26-35 alphanumeric characters, Ethereum unique addresses contain only hexadecimal numbers because Ethereum (ETH) addresses can only contain the letters “A” through ” F” and the numbers 0 to 9.
According to the ETH Optimism vanity address generator, creating an Ethereum vanity address starting with “0xFad69” will take Up to five minutes.
How to create a Bitcoin vanity address?
There are two ways to create a vanity BTC address: manually creating and using a specialized vanity address generator service. The first method relies on software and requires some computing power and coding skills to run a program to find Bitcoin addresses that begin with a specific combination of words.
Many bitcoin experts, including Trezor’s Tetek, agree that the first method is the safest way to create a vanity bitcoin address because it allows users to keep the seed phrase private. As the sole owner of the private key or seed phrase, the user can be the sole holder of the funds associated with that address.
The manual method requires installing vanity address generation software such as VanityGen, which is available on the cloud-based software website GitHub. Certain computing power specifications are required to run such software, and larger symbol sequences require more time to create virtual addresses.
Various sources estimate that generating a personalized address containing five-symbol words takes about an hour using an average personal computer, and that larger sequences like seven-symbol sequences can take as long as three months. More complex setups involving powerful graphics cards or even application-specific integrated circuit (ASIC) chips can significantly reduce the time required to generate virtual addresses.
The second method of creating vanity addresses is simpler, but less secure because it relies on delegating address searches to third-party services, also known as “vanity address miners.”
Reliance on Bitcoin vanity services is associated with significant risks, as miners could take over the address and its assets at any time. This is because such miners first receive the private key before passing it on to the client. The private key is generated when a Bitcoin address is created and cannot be changed afterwards.
Vanity generation services are often offered through sites such as Vanitygen.net, allowing users to simply order a desired word or sequence and then use the computing power purchased online to search. Such services typically allow users to order alphabetic sequences of up to eight symbols. Once generated, the private key to the personalized address will be sent to the customer’s email in exchange for an agreed upon price.
For example, generating a Bitcoin vanity address that begins with “1Satoshi…” will cost approximately 0.0217 BTC, worth approximately $600 at the time of writing. A larger sequence like “1Nakamoto…” would require at least 0.11 BTC, or as much as $3,250.
It is important to note that not all letters and numbers can be included in a vanity Bitcoin address, like a normal BTC address. Some letters, such as uppercase “O”, uppercase “I”, lowercase “L” and the number “0”, are excluded from the 26-35 alphanumeric character set available to all Bitcoin addresses. These exclusions are intended to help users avoid confusion when sending funds on the Bitcoin blockchain.
Risks of Using Bitcoin Vanity Addresses
The decision whether or not to use a Bitcoin vanity address ultimately comes down to the reason for owning the address in the first place, taking into account all possible risks. Some cryptocurrency exchanges such as BitMEX have attempted to use vanity addresses using the native Segregated Witness (SegWit) address format Bech32 with the “bc1qmex…” prefix.
A spokesperson for BitMEX told Cointelegraph that most of the vanity addresses are used for marketing or considered “a little fun.”
“Bitcoin vanity addresses became very popular on BitcoinTalk around 2011, when many people solicited donations to their personal vanity addresses (such as 1Name),” noted a BitMEX representative, adding:
“Before the advent of structured proof-of-reserve systems, the exchange-wide use of vanity addresses provided a way for users to informally summarize exchange reserves.”
The company is also experimenting with vanity addresses to make it harder for attackers to deceive users, as BitMEX only provides vanity addresses to users. However, the Representative noted that one should not rely on vanity addresses as a security mechanism, as more advanced attackers could manage to replicate the vanity address format.
A BitMEX spokesperson said that vanity addresses are best for advanced users: “The main weakness of individual users is reduced privacy. In general, we recommend that users not reuse addresses at all,” adding that newer BitMEX customer addresses no longer have Vanity prefix.
Tetek, a Bitcoin expert at Trezor, strongly advises against using vanity addresses, as such addresses (even when generated in a secure manner) promote address reuse, which is a bad practice in terms of privacy. He said:
“If a bitcoin address is used multiple times, others can easily trace a person’s receiving and spending habits. Therefore, it is also easier to identify the owner of the address.”
In addition to privacy and asset security risks, vanity BTC addresses are also associated with security breaches. In 2022, hackers managed to steal $3.3 million in cryptocurrency through a vulnerability in Profanity, an Ethereum vanity address generation tool. Additionally, in March 2023, attackers also used hacked vanity addresses to steal $500,000 worth of tokens from an airdrop from Layer 2 scaling solution Arbitrum.
The Future of Bitcoin Vanity Addresses
Although Bitcoin vanity addresses have fallen in popularity since 2011, there is no evidence that such addresses have not been used in recent years.
A recent report describe Using a Bitcoin vanity address that contained expletives apparently aimed at Russian President Vladimir Putin.address has Deal done Between 2018 and 2020, 67 transactions totaled 0.29 BTC ($7,595) with a zero balance.
One of the last recorded transactions include A transaction of 0.0004 BTC ($10) to the public bitcoin address of famous bitcoin critic Warren Buffet. given BTC address and gift from Tron founder Justin Sun.
Furthermore, challenges and considerations remain. For example, the security risks associated with vanity address generators must be addressed, thereby facilitating the development of more secure and user-friendly tools. As blockchain systems develop and incorporate new features, vanity address creation may become more streamlined and available to a wider audience than just those with coding expertise.
However, privacy concerns arising from address reuse will remain an important consideration. Therefore, users who want to personalize their addresses must balance the advantages of uniqueness with possible privacy breaches.
While it’s important to understand that Bitcoin vanity addresses are quite risky and expensive, such addresses clearly unlock some new and possibly strange use cases for the cryptocurrency. With this in mind, whether the future of Bitcoin vanity addresses is bright depends on Bitcoin users.
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