A Bitcoin wallet label is an identifier that is used to track Bitcoin transactions. Transactions are grouped into “blocks” and each block contains a cryptographic hash of the previous block, a timestamp, and transaction data.
Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
Wallet labels help to keep track of where bitcoins are stored and whether they have been spent. They also help to ensure that only valid bitcoins are sent to and from a particular bitcoin address.
When sending or receiving bitcoins, a user may be required to provide a wallet label in order to complete the transaction.
A Bitcoin wallet label can be thought of as an account number for a specific bitcoin address. In the same way that a bank account number is used to track deposits and withdrawals, a Bitcoin wallet label is used to track transactions associated with a particular bitcoin address.
Just as you would not want to use the same bank account number for both personal and business transactions, you would not want to use the same Bitcoin wallet label for both personal and business transactions.
A Bitcoin wallet label is not the same as a Bitcoin address. A Bitcoin address is a string of alphanumeric characters that represents a destination on the Bitcoin network.
A Bitcoin wallet label is an identifier that is used to track transactions associated with a particular Bitcoin address.