Picture this: you’ve just started your crypto journey. You don’t know everything about cryptocurrencies, but you know just enough to find a crypto wallet, sign up, and reach a point where your crypto wallet address is required.
You navigate through the crypto wallet app, looking for the crypto wallet address, but then you realize that you don’t even know what such an address looks like. Thus, you don’t know what you’re looking for.
If this is the case, don’t worry, we’ve got you covered. In this article, we will discuss what a wallet address is, how it works, why is it important, what types of addresses you can find, and what their use cases are. This way, you will never have to worry about your crypto wallet addresses and where to find them.
What Is a Wallet Address?
A cryptocurrency wallet address is a unique and randomly generated string of letters and numbers all crypto wallets offer to each and every user who signs up on their platforms. The public wallet address is available to anyone who wants to send you crypto, so you don’t need to keep it safe as you do with the private keys.
However, what you must do is share the correct address. If you offer the wrong wallet address, your funds will probably be lost forever, as you cannot reverse a wrong transaction.
Also, when sending funds to another trader, make sure to enter the recipient’s wallet address as carefully as possible, in order to avoid potential misunderstanding and, once again, the loss of your funds.
You got it? A wallet address is used to receive or send digital assets. It’s somehow like a bank account number, but it looks different and works differently.
It is essential to note that wallet addresses are entirely different from a public key or a private key. No matter what type of wallet you use (software or hardware wallet), you will always have public and private keys, as well as wallet addresses.
Their use cases are different, and while you can share the public key and the wallet address, your private key should stay as safe as possible and never be shared with anyone.
How Do Wallet Addresses Work?
As we mentioned before, wallet addresses are used to complete crypto transactions, whether we’re talking about sending or receiving crypto assets.
Thus, let’s say you have some crypto that you want to send to Jake. Both you and Jake have Bitcoin (BTC) and want to complete the transaction in BTC.
Thus, you access your crypto wallet, go to the “Send” section, and enter the amount of Bitcoin you want to send. Then, you will also have to enter Jake’s wallet address.
Simply ask Jake for his address and paste it in the field. Check it thoroughly so that you don’t send the BTC coins to someone else, check the transaction fees, and then confirm the transaction.
This way, you’ve just used Jake’s wallet address to send him the Bitcoin you wanted.
Receiving crypto is the other way around. Jake wants to send you BTC and requires your Bitcoin address to complete the transaction. After the transaction is completed, the BTC coins should reach your wallet in up to a few minutes. If the network is crowded, it can take more, but this doesn’t usually happen.
Why Are Wallet Addresses Important?
So, why is a wallet address so important? Can’t you just use that QR code to send or receive digital assets? After all, most apps now offer this option, too.
Well, this is not the only reason why crypto wallet addresses are important. Let’s analyze the fact that wallet addresses facilitate the secure transfer of digital assets. See that “secure” there?
Thus, a wallet address is also used to maintain and even increase a network’s safety and security. Considering that all wallet addresses are unique, they can highly contribute to the security provided by a certain blockchain.
How Are Wallet Addresses Generated?
This is where things get a tiny bit more interesting, yet not so hard. Basically, wallet addresses are hashed versions of public keys. Thus, whenever a wallet address is generated, the blockchain wallet takes the public key and gets it through a hashing function. This way, transactions made to or from that wallet address will be automatically received or sent by/to that account’s public key.
Wallet Address Formats
Wallet addresses are unique, but they have some things that help us determine which blockchain network they are compatible with. Thus, let’s see what various types of wallet addresses look like.
Bitcoin
Being the first cryptocurrency ever launched and having been around for 15 years already, Bitcoin has gone through many changes, including in what concerns wallet addresses. Thus, Bitcoin wallet addresses can start with various combinations.
The original address format, also known as Legacy or P2PKH (Pay-to-Public-Key-Hash) started with “1”:
Then, a newer type of Bitcoin address Compatibility or P2SH (Pay-to-Script-Hash) appeared. They allow senders to require multiple digital signatures before a transaction is authorized. P2SH addresses start with a “3”:
Afterward, we also have Segwit or Bech32 Bitcoin wallet addresses. These are commonly used for Bitcoin transactions these days, and this is probably why you may recall them. They are designed to limit the amount of information stored for each transaction, reducing the transaction fees.
Segwit or Bech32 Bitcoin addresses always start with “bc1”:
Ethereum
For Ethereum, on the other hand, wallet addresses start with a single group of letters: “0x.”
Ethereum addresses usually are the longest formats, consisting of 40 characters besides the “0x” group.
In the Ethereum ecosystem, the “0x” address format applies to all ERC-20 tokens, so this is why you may think that you’re dealing with ETH all the time, while you can actually talk about stablecoins or other hundreds of ERC-20 tokens out there.
Although ETH and ERC-20 tokens have the same wallet address format, the tokens are different. They are just part of the same ecosystem and were developed on top of the same blockchain.
We also recommend: How to Find Coinbase Wallet Addresss
FAQ
How do I get a wallet address?
You automatically are assigned a wallet address when you create a crypto wallet, even when you set up hardware wallets. However, you can generate an address if you want to create a paper wallet.
What is an example of a wallet address?
A wallet address for Bitcoin can look like “bc1qc68nfq65ut0dslspuv9w79fz6r4e7x49fgvh35,” while an Ethereum address can be “0xe6574F02A9b88905C5d5CB4AE6b76C7dF20749e8.”
Is it safe to give a wallet address?
Yes, it is totally safe to share your wallet address. In fact, you actually need to do it in order to receive funds.
In Conclusion
Wallet addresses are widely used in the crypto industry to send or receive digital assets. Everyone who wants to complete a transaction through a crypto-related platform has to share or receive a wallet address and enter it in a special field to authorize the specific transaction.
If you are just starting your crypto journey, keep in mind that a wallet address is entirely different from a public key or private key, although it is a hashed version of the former. And always remember, do not (ever) share your private key. Keep it private, as its name says.
