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Why do Bitcoin addresses use an alphabet of only 58 characters?

  1. To enhance security measures

  2. To avoid confusion with certain characters

  3. To simplify coding

  4. To comply with international standards

The correct answer is: To avoid confusion with certain characters

Bitcoin addresses utilize an alphabet of only 58 characters primarily to avoid confusion with certain characters that can be easily misinterpreted. The characters chosen exclude characters like "0" (zero), "O" (capital letter O), "I" (capital letter i), and "l" (lowercase L), which can look very similar in certain fonts. By eliminating these characters, the design minimizes the risk of user error when entering addresses, thereby enhancing the overall usability of Bitcoin addresses. This consideration is crucial since inaccuracies in entering an address can lead to lost funds, making it vital to have a character set that is distinct and clear. The focus on reducing potential confusion fosters better user experience and contributes to security by ensuring that users can easily differentiate between characters in their Bitcoin address. Other options, while they may touch on important aspects of Bitcoin design, do not directly address this specific purpose of character selection in the formation of Bitcoin addresses.