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The documentation ( https://stellar.github.io/js-stellar-sdk/Keypair.html ) just describes what algorithm is used at the core. But that algorithm produces bits. What encoding is used on these bits to arrive at the actually public key that gets used for transactions?

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It should be roughly this (see source from js-sdk):

base32( versionByte + data + CRC16-XModem(versionByte + data) )

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