A checksum is generally designed to detect accidental errors in small blocks of data. It allows the user to check if piece of data or information is the same as expected. For eg: In Bitcoin, addresses include checksum so they can be checked to see if they have been typed correctly.

This allows users to avoid sending Bitcoin to poorly formed addresses. They are created by hashing data through SHA 256 algorithm twice, the first 4 bytes of the result is taken as Checksum. 1 byte will be equal to two characters.