Do I need a Bitcoin Wallet Address? How to Get One? A DIY Guide
Bitcoin is a digital currency. In order to own any Bitcoin, you need a digital place to store it. These digital storage locations are called “wallets”. Once you register on a cryptocurrency website – a crypto exchange, for example – you will be issued a wallet, which has an address. A wallet is the basic building block, the cornerstone, of your crypto experience. It’s the absolute fundamental key to understanding how Bitcoin, or any cryptocurrency, is transferred from one person to another.
Regardless of why a transaction is taking place, the sender determines an amount of Bitcoin to be transferred from his/her wallet to a destination wallet. If you are new to to the world of cryptocurrencies, a Bitcoin wallet address may seem a little confusing.
If you don’t know how to access your wallet, then you won’t be able to send Bitcoin to another person. If you don’t know your wallet address, you won’t be able to tell another person how to send Bitcoin to you. So, it is highly recommended that you store login, password, and wallet address information offline, in order to maintain and preserve your Bitcoin.
What is a Bitcoin wallet address?
An identifier is a unique alphanumeric string that is used to make transactions with BTC. The main transactions include sending and receiving cryptocurrency. In other words, an address is the same as a physical or email address, which we all use in our everyday life. This information is required in order to make transfers to virtual accounts, and after this an operation can be carried out. Keep in mind that a Bitcoin address is very important data and without it you won’t be able to manage your coins.
A Bitcoin address is used to accept payments and transfer funds. Today any user has the opportunity to create any number of identifiers to increase the level of security and anonymity of payments. A new address is created automatically with a new transaction.
To receive payments and to send funds, you will need an address. The receipt of the address is preceded by the registration of the wallet. In order to generate a Bitcoin address in the wallet, a special private key is used. This process is automatic.
What does a Bitcoin address look like?
Your BTC identifier is a string of 34 letters and numbers that identify your Bitcoin wallet. BTC addresses begin with either a 1 or a 3 and are case-sensitive.
When you want to receive funds, this is the information that you provide to the person paying you. Your BTC address is oftentimes called your wallet or public address.
This address is considered public because, unlike the private key that controls your wallet, it’s relatively safe to share with the public.
Most wallets make your BTC address readily accessible. You can usually find this number by tapping “Receive” or “Receive BTC”. Some programs also have it listed in your account settings.
While a private key is a long string of numbers and letters that is the password for your wallet. This number makes it possible to send your coins to other people. Anyone who knows your private key, can control your funds. However, in spite of the fact that the Bitcoin identifier is generated through the private key, there is no way to find out its number through the address.
How to get a Bitcoin address?
Well, there’s no shortage of ways to get a BTC identifier. The 3 most popular methods are:
- Setting up an account on an exchange
- Using an online wallet
- Using an offline wallet
Most exchanges give you a BTC address when you create an account. You don’t need to do any trading to have access to your public address. Although convenient, it’s not recommended that you use this identifier for anything more than temporary storage. Exchanges are online which puts your funds at risk for hackers and/or malicious software.
There’s plenty of reputable online wallets that you can use to get a BTC address. Exodus and Jaxx are reliable options that not only support BTC but other coins as well.
Coinbase, although known primarily as an exchange, also provides you with a wallet when you use their service.
Once again, there’s an inherent risk in using these platforms because they’re online.
Offline wallets are the suggested way to get an address to store your BTC. You can either use a hardware device like Trezor or Ledger, or create a paper wallet for your funds. Because these wallets are offline, you mitigate the risk of being hacked by using them.
Hardware devices are the most expensive option, but their security and multiple coin support usually make them worth the higher price tag.
Paper wallets are free. To create one, follow the instructions on a website like bitaddress.org and print out the paper wallet it generates. It will include your private key as well as your public BTC address.
How to find a Bitcoin address?
After you have selected a wallet that meets your needs and registered there, you can get your address. This procedure is pretty similar:
- Log in to your app/program/device.
- Go to the “Receive coins” tab.
- You will have a list of addresses you can use. If you want to create a new one, just click on the “New Address…” button.
How to Make Transactions Using the Bitcoin Address?
First, you need to give this address to someone every time they wish to send you some BTC. So, it’s probably a good idea to keep it in a place that’s easily accessible.
In order to send any amount of BTC directly to such an address, you will have to copy it into your software’s “Send” section.
Once all the other fields have been filled out, including the transaction amount, you will be able to initiate the process from your end. And just like that, with only the recipient’s address, you have successfully sent them a particular amount of BTC from your wallet minus some transaction fees.
Since Bitcoin identifiers are generally too long and quite hard to memorize for most people (i.e. virtually everyone), QR codes have become a relatively popular method to share them. A long string of alphanumeric characters may appear daunting to someone unfamiliar with BTC, but if the same thing is presented in the form of a barcode instead, they are much more likely to understand how the system works.
Here are some tips on how to carry out an operation properly. First, it is not recommended to enter the number manually, but to copy it. Second, Bitcoin addresses are case-sensitive. So, if an error is made when typing in an address, the BTC will go to the erroneous recipient, or the transaction will not pass. The last one is executed automatically if the identifier contains checksum characters.
The Bitcoin address has changed. What to do?
Does a Bitcoin address change? As it has already been mentioned above, some wallets can automatically change the identifier for every new transaction. It happens with programs built on an HD (or hierarchical deterministic) framework, a privacy-centered method for address generation and management. Each public address your wallet generates, stems from your xPub (or Extended Public Key). Once your identifier receives an incoming payment, a new one will automatically be generated and displayed when you click on Request.
The address changes after each transaction you made to get coins. For example, the user has earned money as some number of Satoshis. Once this amount is received on your address, it will automatically change to another one. Then, the next time you decide to replenish your balance or receive a payment from a project, when you click on the “Get” button, you will be provided with another address. At the same time, the old addresses will continue to work, and they can be used to receive other payments.
This change is very important, because if a new address is used every time, the transaction chain of your wallet is messed up. It makes a wallet less vulnerable to hacker attacks.
In fact, regular changes of Bitcoin numbers are faced by users of Blockchain, Coinbase, Bitcoin Core, as well as many other online, hardware, desktop and mobile wallets.
Are an address and a wallet the same thing?
A wallet and an address are not the same thing. An address is a public key to which transactions can be sent. This concept is present in the Bitcoin protocol itself. A wallet is a collection of private keys that corresponds to addresses.
Your private key is a randomly generated string (numbers and letters), allowing coins to be spent. A private key is always mathematically related to the identifier, but is impossible to reverse engineer thanks to a strong encryption code base. If you don’t backup your private key and you lose it, you can no longer access your wallet to spend funds.
There is also a public key. This causes some confusion, as some people assume that a address and the public key are the same. That is not the case, but they are mathematically related. A Bitcoin wallet identifier is a hashed version of your public key. The public key is used to ensure you are the owner of an address that can receive funds. The public key is also mathematically derived from your private key, but using reverse mathematics to derive the private key would take the world’s most powerful supercomputer many trillions of years to crack.
Besides these key pairs and a Bitcoin wallet address, your software also stores a separate log of all of your incoming and outgoing transactions. Every transaction linked to your identifier will be stored by the wallet to give users an overview of their spending and receiving habits.
The wallet stores all of the generated identifiers, which can be used to accept cryptocurrency.
Most often, the wallet format is a text file on a disk, but it can differ in different types of wallets and have additional functions, such as encryption and address marking.
Your wallet generates a “master” file where all of the preceding details are saved. For computer users, that file is called wallet.dat. It’s saved on a Windows machine, for example, in the C:\User\Yourname\Documents\AppData\Roaming\Bitcoin\folder. Make sure to create one or multiple backups of this wallet.dat file on other storage devices, such as a USB stick or memory card. The software will let you import a wallet.dat file in case your previous file is damaged or lost, restoring your previous settings, including any funds associated with your address.
Can I send Bitcoins to an old address?
Nothing terrible will happen if the funds are sent to an old address – they will reach the recipient. All public identifiers generated from your wallet can still receive funds, even if they no longer appear under Request. A new identifier will automatically display under Request once the previously displayed address receives a payment.
What is a Bitcoin key?
A Bitcoin private key is a secret number generated to allow individuals to spend their coins. When users are issued an address, they are also issued a Bitcoin private key. It is usually a 256-bit number and since it is the golden ticket that allows an individual to spend his or her coins, it needs to be kept safe and secure. A private key can be used to accept, sell and donate BTC.
In order to effect a transaction, a tool or program that allows importing of the private key should be available to you. However, some wallets may make a transaction without the need of importing the private key. Others will require the private key to be swept. When private keys pass through the procedure of sweeping, a transaction will be broadcast to another address which will include the balance.
Before getting started with importing your private keys, let’s clarify three important definitions.
- Backup: A file containing a wallet’s private key information. Backups can be exported from or imported into a wallet.
- Export: The process of creating a file containing a wallet’s private key data. Exported keys can be imported to a new/different wallet to give access to the BTC associated with the exported private key(s).
- Import: The process of gaining control of BTCs via an exported backup. Wallets can import private keys via text files or QR code scanning.
Bitcoins are not stored locally on your phone or laptop. They are stored on the blockchain and you use a wallet to access the coins for sending/receiving the cryptocurrency. This means if you lose your phone or buy a new laptop you can access your cryptocurrency by importing your key(s) from a previously exported backup.
If you have not already done so, please go ahead and backup your wallet. If you do not backup your wallet and store this information somewhere safe, you run the risk of losing all coins in the event that you lose or damage the device on which your wallet is installed. Once you have a backup, you are ready to proceed.
Bitcoin addresses with the most Bitcoins
The vast majority of Bitcoin addresses hold less than a single Bitcoin, but some have more BTC than most people could ever imagine. Only 115 identifiers contain more than 10,000 BTC, making up nearly 20% of all Bitcoin in existence. Including accounts with balances of 1,000-10,000 coins, we get to approximately 40% of BTC holdings within 1658 addresses or 0.01% of the total number of addresses.
The world’s most popular cryptocurrency exchanges, Bitfinex, Binance and Bittrex have a huge amount of BTC to store – a large portion of which can be found in two cold storage wallets.
After sorting through the 1658 richest identifiers, I found 321 that had not made any outgoing transactions for over 4 years. Combined, these addresses hold 1,091,755 ($7,390,646,225) BTC, or more than 6% of all Bitcoins.
These identifiers are likely a mix of very rich long-term “holders” and some very unfortunate cases of lost Bitcoin. The latter is a particular concern given Bitcoin’s 21,000,000 max supply. There’s no way of knowing how many coins are permanently lost from circulation.
It is estimated that Satoshi Nakamoto, cryptocurrency pseudonymous founder, owns roughly 980,000 BTC. Satoshi made his Bitcoin fortune by being the first ever miner of the cryptocurrency and continuing to mine it throughout the early days of the blockchain. Despite this, Satoshi is absent from the richest list of Bitcoin addresses. Instead, it is thought that his wealth is spread across thousands of different identifiers. For each block Satoshi mined, his reward seems to be held in a unique identifier.
How to find a Coinbase wallet address?
Follow these steps in order to find your Coinbase wallet address:
- Sign up with Coinbase here:
- Go to the Addresses Section
- Click on the ‘Create New Address’ option.
Any address that you create here will remain associated with your Coinbase account forever. You can generate as many identifiers as you like.
Click the “Details” button next to any address to display the corresponding QR code. It works similar to barcodes at the grocery store, and can be scanned with a smartphone to reveal your identifier.
To sum up
Protect your address! Although your user identity behind your address remains anonymous, Bitcoin is the most public form of transaction with anyone on the network seeing your balances and log of transactions. This is the reason why you should change Bitcoin addresses with each transaction and safeguard your identifier. You can also use multiple wallets for different purposes so that your balance and transaction history remain private from those who send you money.
See also: How to cancel Bitcoin transaction?