What Is Bitcoin Address & How To Get One?
Hello Friends 👋
Note: A bitcoin address and BTC address both refer to the same thing. BTC is just a ticker symbol of Bitcoin. There is also another symbol called XBT which also refers to Bitcoin. Here you can learn about the ticker symbols and the difference between XBT and BTC.
It’s been more than 12 years since Bitcoin was created. Since then a lot has happened to the blockchain technology and cryptocurrency ecosystem. Incredible developments and more exciting innovations are emerging in this space. But has it achieved mainstream adoption? Not yet, slowly but surely. Every year a lot of new people are getting into this space and are looking to get started with Bitcoin. But the thing is many users are finding it difficult to understand what it is or how it works.
Actually getting started with Bitcoin is not that complicated at all. You don’t need to understand the tech behind Bitcoin in order to use it. All you need to do is download a Bitcoin wallet and generate a Bitcoin address. Then you can buy Bitcoin, receive, send, store and use BTC seamlessly. Ultimately to get started with Bitcoin you first need a Bitcoin address. Here in this beginners guide, we’ll explain what a Bitcoin address is and how to get a public Bitcoin address to receive, send and store Bitcoin (BTC) securely.
But before we get into that here are a few things you must know about Bitcoin to use it securely and avoid some of the common pitfalls.
Bitcoin and Its Usage
Bitcoin is a digital currency and a global money system that is accessible to everyone. It allows anyone to easily send or receive money without any trusted central authority. You can transfer any amount of value to anyone, anytime and anywhere in the world.
A variety of online retailers are accepting Bitcoin. You can use your Bitcoin to make purchases online and if you are a vendor then you too can accept Bitcoin as a payment for your goods and services.
With Bitcoin, only you control your own money and there is no third party like Bank or PayPal involved in the transaction.
Bitcoin accounts cannot be frozen, payments cannot be blocked, transactions cannot be reversed, and is impossible to counterfeit Bitcoin. But do note that Bitcoin is non-anonymous. All transactions are available publicly and are stored permanently on the Bitcoin blockchain. Anybody can see the transaction and balance of any Bitcoin address. But it’s hard to tell who owns the particular Bitcoin address.
Alright! Now what is the Bitcoin address and why is it important?
What is a Bitcoin address?
Bitcoin address, public address, or simply address is a unique identifier that serves as a location where Bitcoins can be sent. It is also sometimes called a receiving address and it represents a source and destination of a Bitcoin payment. You can share your BTC address with others and ask them to send Bitcoin to your address. It is quite similar to your bank account number which you use to receive, send and manage money.
Each Bitcoin address is unique. It is comprised of 26 – 35 alphanumeric characters and the address usually begins with the number 1 or 3.
BTC Address Formats
You don’t need to get into the technicals but here is an example of Bitcoin address format:
Pay-to-Pub Key Hash (P2PKH) address that begins with the number 1:
Pay to Scrypt Hash (P2SH) address that begins with the number 3:
In addition to these two, there is another Bitcoin address format called Bech32 type. It is a SegWit address format and is also known as “bc1 addresses” as this address type starts with bc1.
Note: Few online services and wallet software don’t support the bc1 address format yet. Currently, P2PKH and P2SH address formats are most commonly used. Also do not confuse the above address formats with other altcoins like for example BCH (Bitcoin Cash). All the above three address formats are just different versions of the Bitcoin addresses. You can use any address format to send and receive Bitcoin.
Okay, now that you have understood a little about Bitcoin and its importance let’s see how and where to get a Bitcoin address.
How To Create a Bitcoin Address?
There are many ways to get a Bitcoin address. Here let’s explore the easiest and the most secure way of creating it. But before we show you how to obtain one here is something you need to know about private keys.
Understanding Public and Private Keys
Each BTC address is unique and each address has an important piece of cryptographic information associated known as keys.
The address which we are referring to here is the public key. It is similar to your bank account number and you can share it with anyone to receive Bitcoin. Another one is a private key (private address) and is paired together with the public key but is not identical (asymmetric). It is similar to your bank account password and it allows you to control your Bitcoins. The private key determines the ownership of Bitcoin and so it should be kept secret.
If you’d like someone to send you Bitcoin then all you do is supply your Bitcoin address (Public key/address). But to spend Bitcoin from that address you need to prove to the network that you are the owner of the private key of the associated public address. Hope that explains. Now that you’ve understood the importance of private keys all you need is a Bitcoin wallet that gives you full control over your private keys.
To receive, send and store Bitcoin you need a Bitcoin address. But to manage the address you basically need a Bitcoin wallet. A wallet is a piece of software that provides a handy way to keep track of all your public and private keys. Just like how your real wallet holds a bunch of currency notes, and credit and debit cards; your Bitcoin wallet contains a collection of Bitcoin addresses.
Any user can generate a Bitcoin address at no cost. Also since Bitcoin addresses are pseudo-anonymous anybody can create any number of addresses they want. A wallet holds all of your address and its keys in a convenient place.
There is a desktop wallet, mobile wallet, hardware wallet and web wallet. All these wallet software will take care of generating an address for you. Not one address but they provide a convenient way to create and maintain as many addresses as you want.
Now the question is which type of wallet to use? It depends on several factors.
Looking to get a Bitcoin address quickly? Then look no further than a paper wallet. It is hands down the easiest way to get a Bitcoin address in seconds.
Paper wallets are offline wallets and they are proven to be the most secure way to store Bitcoins. But only use it if understand and know how to protect your private keys.
Here we’ve explained how to import paper wallet into Electrum Bitcoin wallet.
Are you looking to Buy Bitcoin and hold it long-term? Then choose hardware wallet.
There are many different types of hardware wallets but we prefer Ledger which is the most trusted cryptocurrency hardware wallet. This is a physical device and it looks similar to a USB flash drive. If you are looking for permanent Bitcoin storage then this is the best option.
Soon we’ll make a beginners guide explaining how to configure and use a hardware wallet.
If you prefer to manage your Bitcoin from your PC then choose a desktop wallet. There are many different types of Desktop wallets available for managing Bitcoin. But the most used wallet type is Bitcoin core which is the official Bitcoin wallet. Next comes electrum which is a lightweight desktop wallet.
This post explains how to create a new address in Bitcoin core wallet.
In addition to the above, we also recommend you to read the core wallet beginners guide. It explains how to send, receive, backup and encrypt the wallet.
But before you download and use the core wallet note that this wallet type is too heavy. It consumes an enormous amount of disk space and also a lot of internet bandwidth. If you still wish to use it then we have an article explaining how to reduce the wallet file size. Read more about Bitcoin blockchain pruning.
If you don’t like the way the core wallet works then you can choose Electrum which is a lite-Bitcoin desktop wallet client. Here in this link, you can find extensive articles about Electrum wallet.
Are you looking to create an address and use Bitcoin in your day-to-day activities. Well, you have many mobile wallets that are available for both Android and IOS. It’s simple and easy to install an app on your mobile device. Once installed you’ll have your address ready to store Bitcoin and start transacting on the network.
You can find the complete list of mobile wallets here: https://bitcoin.org/en/wallets/mobile/android/
I would suggest that you do your research and get to know how each wallet type works before you make a serious Bitcoin transaction.
Now as you have got your own Bitcoin address you might be looking to Buy Bitcoin and send it to your wallet address. Before you go ahead here are a few security measures that you must take note of.
How to Secure Your Bitcoin Address
When it comes to securing your Bitcoin balance or the actual address the only thing you need to ensure is to secure the private keys of the associated BTC address. Anybody with access to your private keys will be able to access your address and steal the coins from it. So make sure that nobody can access your private keys except you.
“Not Your Keys, Not Your Coins”
All Bitcoin wallet clients that you find here will provide you full control of your private keys. But you must take necessary steps to protect your wallet.
Be Careful With Exchanges and Online Wallets
Apart from the Bitcoin wallets, you can also obtain a Bitcoin address from an exchange. It’s fast, easy and also offers a convenient way to convert your coins into cash. But remember to use the exchange address temporarily and only for trading purposes. It is not recommended to hold large amounts of BTC on an exchange address just because you don’t own the private keys of that address. Also, make sure to enable 2-factor authentication for your exchange account which will add an additional layer of protection.
Also if you are using an online wallet then ensure that nobody has access to your private keys or the backup seed phrase.
Bitcoin Addresses Are Case-Sensitive
Generating a BTC address is very simple. In most wallets, you’ll find a section called “Receive” where you’ll find the public address. It is clearly visible and is ready to be copied.
Now before you share your address to receive payments or before you make any transaction from your address make sure it is valid and you’ve copied the correct address. Also do note that BTC addresses are often exact and case sensitive. So ensure that the address is transcribed exactly. If you misplace a single character then your Bitcoins will be lost forever.
Check if the address is valid twice or even thrice before sending coins. It is a very essential step because Bitcoins are irreversible. That is once they are sent to an invalid address you can’t get them back so you should be very careful when transacting Bitcoins or basically any cryptocurrencies.
Hope that explains everything about the Bitcoin address.
References - Coin Guides
If you want to share anything or have any suggestions/questions, please leave them in the comments!
That’s it for today :-)
Hope each of you has a great start to your day. I’ll talk to everyone tomorrow.
If you are not a subscriber of Amit Unboxed, join 4,500+ others who read my personal writings & opinions about tech, startups, humans, blockchain & crypto each morning.
Amit Unboxed Supporters
These companies/people make this newsletter and podcast possible, so go check them out and thank them for their support!
Pineapple Group - A Web3 company focused on tech product development. They also provide end-to-end techno-functional consultancy for startups.
Glasban - Your technology growth partner providing software development from conception to delivery - helping you to simplify, strengthen and transform your business.
Versatalia Labs - A next-gen technology product development company working in Computer Vision, AI, ML, Advance Analytics and Blockchain.
Team Dhanashree - Renowned public figure - actor, dancer, choreographer, model and creative movement therapist. She is my inspiration and motivation too :-)
I am a technology enthusiast, entrepreneur & creative thinker, who enjoys crafting Tech Products to make a real difference.
You are receiving this interesting content because you either signed up or you attended one of the events that I spoke at. Feel free to unsubscribe if you aren’t finding this valuable.
Please note that all the content in this newsletter is only for educational purposes. You are advised to do your own research!