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A checksum is a simple way of detecting errors or mistakes in data.

When it comes to Bitcoin, checksums are calculated using a 32-bit portion of a SHA256 hash (the last four bytes) and are used to detect incorrect addresses, helping to prevent transactions from going wrong due to simple typos. A checksum only uses 32 bits because it is more than enough to uniquely identify a Bitcoin address or transaction while still ensuring network efficiency.

Checksumming is the process of computing and confirming checksums quickly to validate data without requiring extensive processing or third-party involvement.