What is the Hedera Account checksum and what does it do?

Recently you may have noticed the introduction of 5 extra characters at the end of your Hedera account number in the Yamgo Dashboard. What are these characters and what do they do?

Key Takeaway: The account Checksum is used to reduce the risk of sending funds to the other account or different network.

Hedera recently introduced a new address format with the aim of enhancing security and reducing errors when sending transactions. This format, introduced in HIP-15, features checksums as a native feature of the network.

The new format consists of a no-checksum address, which is the standard Hedera address, followed by a 5-letter checksum appended after a dash. The checksum serves as an extra layer of protection and is calculated based on the characters in the no-checksum address. If the address is entered correctly, the checksum will match, allowing the transaction to be processed. In the event of incorrect character entry or an invalid address, the checksum will not match, preventing the transaction from being processed.

This optional format aims to minimise errors in manual data entry and increase the overall efficiency and reliability of the Hedera network. Unlike previous address formats (eg. 0.0.12345), the new format eliminates the possibility of mistakenly leaving out or adding digits, ensuring that your transfers arrive at the intended account.