this post was submitted on 10 Aug 2023
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In the Dutch example above, it's house numbers 2-34 in one particular street.
Amsterdam, population 1 million, is divided into roughly 100 4 digit postal numbers (1000, 1001, etc.), that's the same as Budapest and many places.
But I think at one point they then added on the additional postal code letters (AA, AB, ..., ZZ). By adding two letters you can potentially further divide each of the 4 digit postal numbers. 100 x 26 x 26 = 67600 possible postcodes.
In theory, Budapest could easily transition to that. Everyone keeps their existing 4 digit postal number, just add 2 or 3 letters. I googled and Budapest has 200 postcodes. So 200 x 26 x 26 x 22 = 3.5 million postcodes. No need to write the street, number or town anymore. Just a postal code.
I don't know how UK postcodes work, but I think they have an older/mixed system where the city or area is abbreviated. So in the above example for the BBC, the postcode starts with SW because London is in the South West.
On the UK post codes, you're pretty close to correct.
In the first part of the code, you've got 1-2 letters, which is the postcode area and usually based on a city name (W is West London in the BBC example). After the letters you've got 1-2 numbers (or a number followed by a letter, as in W1A). This gives a more granular division of the area, so it'll often refer to smaller towns.
The second part is used to narrow it down to a small group of actual addresses, although the number and area it covers varies.
I went down a bit of a Wikipedia rabbit hole while checking a couple of bits about the format, and learnt that there are actually a few special cases/non-geographic post codes, including the postcode XMA 5HQ, which is specifically for letters to Santa.