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Yes, it's an encoded public key, identifying the service. See https://en.wikipedia.org/wiki/.onion#Format

even "bbcnews" is part of that key, probably brute-forced until that prefix was found.

It must've been brute-forced. According to this one old brute forcer I found [1] but have not thoroughly vetted, it would've been one CPU-day of effort on 2012-era hardware

[1] https://github.com/katmagic/Shallot

Adding onto this: I was able to use https://github.com/cathugger/mkp224o to generate my own v3 address with chosen 7-character prefix in just under 1 hour on my i7-8700k

I imagine an implementation that leverages a GPU could go much faster.

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