Public key hashing with SHA-256 is a crucial step in generating a wallet address. Here's what happens:

1. _Public key_: A public key is generated from a private key using elliptic curve cryptography (ECC).

2. _SHA-256 hashing_: The public key is hashed using SHA-256, which produces a fixed-size string of 256 bits (64 characters).

3. _Hash truncation_: The resulting hash is truncated to a shorter length, typically 20-24 bytes (40-48 characters).

4. _Wallet address_: The truncated hash is used as the wallet address, which is shorter and more secure than the original public key.

By hashing the public key with SHA-256, the resulting wallet address benefits from:

1. _Improved security_: SHA-256 is a cryptographically secure hash function, making it difficult for an attacker to reverse-engineer the public key from the address.

2. _Reduced size_: The hashed address is shorter than the original public key, making it easier to store and transmit.

3. _Increased privacy_: The hashed address reveals less information about the public key, enhancing user privacy.

Public key hashing with SHA-256 is a fundamental step in generating a secure and unique wallet address, ensuring a safe and efficient way to receive cryptocurrency funds.