Bitcoin Wallet Address: Understanding BTC Wallet vs Address.
A Bitcoin wallet address is a digital address, made up of letters and numbers, that you use for sending and receiving Bitcoin transactions. In just the same way that an email address is used to send and receive emails, a Bitcoin wallet address is the digital address from which you send and receive BTC. Because an address is just a modified representation of a Bitcoin
public key, you can securely share your BTC address with anyone they wish, without having to worry about security vulnerabilities. Before you send funds from an exchange to your digital wallet on the Bitcoin network, you will want to first ask yourself, "What is my Bitcoin address?"
In this article, we’ll go over the basics of Bitcoin addresses, private keys, and wallets. We’ll look at the fundamentals of sending and receiving BTC transactions. Finally, we’ll highlight a few commonly-used Bitcoin wallet formats.
Bitcoin Addresses, Private Keys, and Wallets.
What is a Bitcoin wallet address? Also known simply as a Bitcoin address or Bitcoin wallet address — a BTC address is distinct from a Bitcoin private key or a Bitcoin wallet. While all three of these things are interconnected, it’s crucial to understand crypto
the differences. Let’s have a look at how each works to support transactions on the Bitcoin protocol.
A Bitcoin address is a more efficient way of representing a Bitcoin public key. Just like any other public key cryptosystem, the Bitcoin network uses asymmetric encryption. This is just a fancy way of saying that the network enables users to generate and use private-public key pairs.
On most public key cryptosystems, users just need to share a public key in order to receive encrypted messages. Similarly, it’s possible to receive BTC transactions through a Bitcoin public key. However, a BTC wallet address is widely considered to be the better choice. Addresses have two major benefits over public keys.
First, addresses are created using hashing algorithms, which adds an extra layer of encryption for enhanced security. This means that it’s very, very difficult to reverse-engineer the corresponding private key given only a Bitcoin wallet address. As a result, there’s effectively zero chance that someone else other than the owner of a specific address can spend funds belonging to that address.
Second, buy bitcoin addresses are much shorter and easier to manage than public keys. In other words, they offer a smoother user experience. Bitcoin wallet addresses function like email addresses in the sense that both can be used to provide a means of secure communications. The main difference is email addresses are used to determine where to send text or files, while Bitcoin wallet addresses are used to determine where to send BTC transactions.
When sending BTC (or any other cryptocurrency), always make sure to use the correct wallet address. Whenever BTC is sent to the wrong address, there is no solution that enables the sender to recover funds. If you send BTC to the wrong address, those coins are almost certainly gone forever.
Bitcoin wallet addresses always start with a "1", "3", or "bc1", making them easily distinguishable from public keys and private keys. Bitcoin public keys and addresses are presented in various formats. Here are a few examples.
Note: These examples are listed for educational purposes only. Don’t send funds to any of the following destinations. In a supported wallet address, you'll need to generate Bitcoin address (sometimes does automatically) and check Bitcoin address you're sending funds to.
What Does a Bitcoin Wallet Address Look Like?
Bitcoin wallet addresses comes in a variety of formats. Public keys are longer than public addresses. For additional security and ease-of-use, it's best to share public addresses rather than public keys. Both public keys and public addresses can be shown in compressed and uncompressed formats.
Bitcoin Public Key (Uncompressed):
Bitcoin Public Key (Compressed):
Bitcoin Wallet Address:Bitcoin
Wallet Address (Compressed):
Sites like bitaddress.org can be used to create a Bitcoin (BTC) paper wallet. Remember to save your secret (a.k.a. private key) in a secure place, crypto and don't share it with anyone. Your share (a.k.a. Bitcoin wallet address) can be shared freely when you want to receive funds.
As mentioned earlier, private keys are generated together with public keys (and addresses) as part of private-public key pairs.
Bitcoin private keys are a very important part of keeping BTC secure on the Bitcoin network. Each Bitcoin private key is essentially a very secure passcode that is used to unlock and spend BTC belonging to a specific public key and wallet address. This means that Bitcoin private keys should always be kept secret. If someone has access to your private key, they could easily steal your BTC.
Just like BTC wallet address formats, Bitcoin private keys come in a variety of formats. Here is an example of a private key in hexadecimal format.
Bitcoin Private Key: DA46B559F21B3E955BB1925C964AC5C3B3D72FE1BF37476A104B0E7396027B65.
The only way to spend funds on the Bitcoin network is through the use of a private key. In regards to private key management, there are two main types of wallets: custodial wallets and non-custodial wallets. Coinbase, Kraken, and Gemini are examples of custodial wallet providers. Komodo's flagship product is the AtomicDEX non-custodial wallet. BRD, Trust Wallet, and Exodus are examples of additional non-custodial wallet providers.
With custodial wallets, a custodian (the wallet provider) keeps private keys secure on behalf of wallet owners. Users typically create/ log into an account via an email address and password. Custodial wallets never require users to hold their private keys. If you forget your wallet password, regaining access to funds is quite easy. You can think of this sort of as a Bitcoin account, rather than a pure wallet. You would just go through the typical password reset steps through email as you would for most other online accounts. However, there are potential security risks involved with trusting someone else to manage your private keys. For bitcoin example, if a wallet provider’s database suffers a security breach, private keys may be compromised. This could lead to the theft of funds.
With non-custodial wallets, wallet providers never store private keys. The user is responsible for keeping their own private keys secure. You sometimes have the option to export a private key (usually in WIF format) and use it to access a non-custodial wallet. However, wallet providers widely recommended to avoid using a private key directly as a means of accessing a non-custodial wallet. Much like custodial wallets, users typically create/ log into a non-custodial wallet via an email address and password. Note that a few types of non-custodial wallets (e.g. desktop applications) sometimes don’t require you to create an email or username login. While non-custodial wallets generally provide more security than custodial wallets, the process of recovering access to funds may be a bit more difficult if you forget your password.
So what happens if you somehow forget your password to a non-custodial wallet? Instead of being able to reset your password via an email account, you will need to use a seed phrase in order to regain access to your funds. Sometimes called a mnemonic phrase, a seed phrase is a list of random and unique words (usually 12 or 24 words) that is generated whenever you create a non-custodial wallet. You should write down the seed phrase and store this information in a secure place.
Just like private keys, seed phrases should always be kept secret.