Vanity addresses are personalized blockchain addresses generated by specialized algorithms. These addresses can include a desired string of characters, making them more easily recognizable and identifiable. What are vanity addresses used for and what are the associated risks?
What is a vanity address?
When you create a cryptocurrency wallet, an address is automatically generated. These addresses consist of a long string of random characters that have no special meaning. However, it is possible to create a personalized address, called vanity addressusing address generation algorithms.
Vanity addresses are created by specifying a desired string of characters, which is then used to generate a wallet address. The algorithms used to generate these addresses take into account the desired character string and generate wallet addresses that include this character string.
Vanity address creation can take time, as the algorithm must try many combinations before finding an address that includes the desired character string. Moreover, creating these addresses can be costly as it requires significant computational resources.
So, the longer the desired character string will be, the longer the algorithm will take to find an address matching the query.
Here is an example of generating a vanity address on Ethereum with a dedicated tool. The difficulty depends on the number of characters desired. The same applies to the estimated duration, even if the most limiting factor remains (in this case) the computing power of the processor:
Vanity addresses are often used for advertising purposes or to facilitate the recognition of wallet addresses. For example, a business can create a custom wallet address containing their name to facilitate recognition of the address by users.
Most often, when vanity addresses are mentioned, it is about Bitcoin and Ethereum blockchains, where this practice is most common.
Here are some examples of known vanity addresses on Ethereum:
- 0x1111111254fb6c44bAC0beD2854e76F90643097d : this address is the 1inch DEX aggregator router;
- 0x112234455C3a32FD11230C42E7Bccd4A84e02010 : this address is the “deployer” of the Ethereum Name Service (ENS) protocol on the Goerli testnet;
- 0x000000000000000000000000000000000000000 : this address does not belong to any user, it is used to destroy tokens (burn);
- 0x00000000000000000000000000000000000dEaD : this vanity address is a variant of the one mentioned above.
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The only reliable way to get a vanity address and do it yourself. Although it requires special knowledge, this method is the safest, because no one can see the private and public keys that will be generated.
By installing the right software, it is then possible to use the power of its processor and its graphics card to carry out the operation. Be careful, this requires manipulations that can damage your equipment. If you are interested, a post on the BitcoinTalk forum explains how to do it.
The other methodmuch less secure, consists on joining a pool and delegating work to minors. The various risks associated with this method make it particularly dangerous and unviable.. Indeed, in the past, tools of this type have been corrupted, and users have lost the cryptocurrencies associated with the addresses they had generated via this method.
The main risk of vanity addresses
The biggest risk with vanity addresses comes from the software used to generate them. If the computer on which the software is installed is not properly secured, it can be compromised by malware and this can lead to the theft of the cryptocurrencies associated with the vanity address.
In addition, it is also possible that the software itself is corrupted and that its creator then has the possibility of recovering the information related to the vanity addresses that it will generate.
The close link between vanity addresses and address poisoning
Since it is possible to generate an address with the characters you want with a specialized algorithm, malicious individuals use this to deceive cryptocurrency holders in order to steal their funds. That’s what we call the poisoning address.
To do this, an individual gets a blockchain address that shares the same first 4 or 5 and last 4 or 5 characters of your address. He then sends a small amount of cryptocurrency to your address so that his address, which is very similar to yours, appears in your transaction history.
Then, to manage to steal funds from you, the scammer hopes that when you transfer cryptocurrency to your address, you will copy its address from your transaction history, thinking it’s yours. In this way, the scammer will have deceived your vigilance, and will have recovered all the cryptocurrencies that you have transmitted to him, without you being able to do anything to recover them.
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