What Is a Bitcoin Wallet Address?

If you were confused when seeing a Bitcoin address for the first time, you are certainly not alone. In this article, we’ll explain what a Bitcoin wallet address is, how you can get your own Bitcoin address and the different types of addresses you will be encountering in your Bitcoin journey.

A Bitcoin wallet address is a sequence of alphanumeric characters that’s typically between 26 and 35 characters in length. Someone who wants to send Bitcoin to you needs to know your Bitcoin address to do so.

Bitcoin addresses appear random to the human brain, but there’s thankfully no real need to memorize them. Here is an example of what a Bitcoin address looks like:

1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

How to get a Bitcoin wallet address?

A Bitcoin wallet is a tool that allows users to send and receive Bitcoin. You will automatically receive one or more Bitcoin addresses when you set up a Bitcoin wallet, but you can generate and use as many Bitcoin addresses as you want.

When you set up a Bitcoin wallet, you will also receive a recovery phrase, usually consisting of 12 words, that you can use to get access to your Bitcoin at any time – even if you uninstall your wallet software or lose your device. It’s extremely important to back up your recovery phrase securely and not share it with anyone. You can use a metal recovery phrase backup for additional security.

There’s many different types of Bitcoin wallets available. Software Bitcoin wallets can come in the form of desktop applications, mobile applications or web browser extensions. There are also hardware Bitcoin wallets, which you can use in conjunction with software wallets for better security.

Here’s a quick selection of Bitcoin wallets that you can use to get your first Bitcoin wallet address and start transacting with BTC:

• Ledger Nano S Plus (hardware wallet)
• Electrum
• Coinbase Wallet
• Trust Wallet
• BitPay Wallet

Why the term “Bitcoin wallet” sometimes causes confusion

The term “Bitcoin wallet” is slightly misleading, as it suggests that your Bitcoin wallet stores BTC in the same way that a real-world wallet stores cash. However, this is not the case, as a Bitcoin wallet actually stores the public and/or private keys that are necessary to send and receive BTC and uses them to receive and authorize transactions.

For example, let’s say that you installed a Bitcoin wallet on your phone, and used it to send and receive Bitcoin. Even if your phone was destroyed, lost, or stolen, you would still be able to access your Bitcoin, provided that you backed up your recovery phrase and/or private key.

Meanwhile, if the same happened to your actual wallet containing cash, your money would be gone for good.

The different types of Bitcoin addresses

There are four main types of Bitcoin addresses. These different types of addresses are cross-compatible, so you can send BTC from one type of address to another type of address without issues. However, it’s useful to know that there’s different Bitcoin address formats to avoid confusion.

Segwit addresses, which start with “bc1”:

bc1q9pyqckt54ztwv9antnwnynfara25xw9hd8wuak

Legacy addresses, which start with “1”:

17JNFz3ZgdRLFhko9fRYPHxaE6JPLxnnP7

P2SH (pay-to-script hash) addresses, which start with “3”:

37XYKrFoNXggpK3KYHoP73fu2XncJziPd5

Taproot addresses, which start with “bc1p”:

bc1pkxkv5st2rnflth245j3gh26ck857qy3y4866er5z955n8zzhx0wsc9f8sr

Please note that the addresses used as examples above were randomly selected from a Bitcoin block explorer and are merely meant to illustrate what different Bitcoin address formats look like.

A Bitcoin address is derived from a public key through a one-way cryptographic hashing process. The public key is itself also derived through cryptographic means, but from a private key instead. Let’s quickly learn how public keys and private keys are used by the Bitcoin protocol.

Private keys and public keys in Bitcoin

In order to send Bitcoin, the transaction needs to be signed with a private key. A simple analogy would be that a private key is like a password that provides access to your BTC. Each private key is paired to a public key, which allows you to receive Bitcoin transactions.

A public-key cryptography system is a fundamental part of the Bitcoin protocol. In public-key cryptography, each public key (which is safe to disclose publicly) has a corresponding private key (which must be kept secret).

In Bitcoin, each private key (and public key) is actually just a 256-bit number. However, randomly guessing a private key that has any BTC tied to it is next to impossible, as there are 2^160 possible private keys. This number is incomprehensibly large for the human brain, but here is what it looks like, in case you’re curious:

1,461,501,637,330,902,918,203,684,832,716,283,019,655,932,542,976

In Bitcoin, public keys are used to receive BTC, while private keys are used to approve the spending of BTC. A public key is derived from a private key using a one-way cryptographic function.

The cryptography involved in the process is very clever, and there are plenty of resources online that provide detailed explanations of how it works. If you want to learn about this topic in-depth, we recommend you check out the 4th chapter from the book Mastering Bitcoin by Andreas M. Antonopoulos.

For the purposes of this article, what’s important to understand is that by using a one-way cryptographic function, deriving a public key from a private key is “easy” (doesn’t take much computational power). Meanwhile, reversing the process to derive the private key from the public key would require enormous amounts of computational power.

Since computing the private key corresponding to your public key is next to impossible, it’s safe to disclose your public key or Bitcoin address (apart from potential financial privacy concerns).

The only realistic way for someone else to get your private key and steal your Bitcoin is if you reveal your private key yourself or if someone manages to steal it from your computer, mobile phone or physical backup.

Generally speaking, you should avoid storing your private key(s) on devices that are connected to the internet. The most convenient way to store your private keys offline is to use a hardware crypto wallet.

The bottom line

It’s likely that you will be using many different Bitcoin addresses during your journey of investing in and using Bitcoin. Hopefully, our article helped clear up some misconceptions and demystified the quirks of Bitcoin addresses, which appear to be a completely random sequence of characters at first glance.

If you are just getting started with Bitcoin and would like to learn more, make sure to check out our ultimate guide to investing in Bitcoin.

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