Address
Wallet address definition: A unique identifier used to send and receive cryptocurrencies on a blockchain network.
A wallet address is a unique combination of characters used to receive cryptocurrency, similar to an email address but for crypto transactions
Your wallet address differs from your private key, which is used to access your cryptocurrency holdings and must be kept confidential
What is a wallet address?
A wallet address is a unique string of alphanumeric characters representing a destination for a cryptocurrency transaction, much like how an email address facilitates the sending and receiving of emails, a crypto address is essential for transferring tokens or coins from one user to another.
Example
You want to send Bitcoin to a friend. They would provide you with their wallet address, which would be a string of characters such as, '1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa'. You would then create a transaction to send Bitcoin to this address.
How do I create a wallet address?
Creating a wallet address is simple:
Select a trustworthy cryptocurrency wallet app or hardware wallet
Follow the setup instructions, which usually involve creating a new wallet
After setting up your wallet, it will automatically generate a wallet address for you
For increased privacy, you can create multiple addresses within the same wallet.
How do I find my wallet address?
Steps to find your wallet address will be a little different in each wallet - but will look something like this:
Log in to your wallet
Select the network you want to receive crypto on - for example, Ethereum
Find the option labelled receive and select it
Your wallet address should now appear so you can copy it - some wallets also offer a QR code to make this easier
Remember, if your exchange/wallet supports multiple blockchains, you will have a different wallet address for each one. Ensure you select the correct wallet address for your transaction.
How do wallet addresses work?
Crypto transactions are pseudo-anonymous, so wallet addresses serve to verify the senders and recipients. When someone sends cryptocurrency to your wallet address, the transaction is recorded and verified on the blockchain, creating a publicly visible record of the transaction and the wallet addresses of both parties.
Is my crypto wallet address anonymous?
Yes and no. Technically, your cryptocurrency wallet address is anonymous. However, it’s important to note that there are methods to identify 'anonymous' wallets.
Remember, transactions on blockchains like Bitcoin and Ethereum are publicly visible. In the past, organizations like Chainalysis have collaborated with the IRS to match addresses to individuals.
What’s the difference between wallets, keys, and addresses?
Let's explore the differences between your wallet, your keys, and your wallet address.
Wallet: A digital tool that stores your keys and addresses, providing a secure way to access and manage your cryptocurrencies.
Keys: Your wallet contains public and private keys. Your public key is similar to your bank account number, it can be shared with others without compromising your security. While your private key is similar to your bank account PIN, it allows access to your holdings, so it should be kept secret and secure.
Wallet address: A wallet address is a shortened version of your public key. It can be shared with others to easily send and receive cryptocurrencies.
What's a two-key system?
Most cryptocurrencies utilize a two-key system, consisting of a public key (which becomes your wallet address) and a private key, to enhance security.
Public key: A public key is derived from your wallet address. It functions like a bank account number and can be shared freely with others.
Private key: A private key is used to access your cryptocurrency and authorize transactions. You should never share your private key with others, as it grants access to your crypto wallet and its holdings.
Is there any way to create a shorter wallet address?
Since crypto addresses can be difficult to memorize, some crypto wallets and services offer the option to create a short, customizable wallet address, including:
Unstoppable Domains
Ethereum Naming Service (for Ethereum wallet addresses)
Coinbase Wallet (for Coinbase Wallet users)
Understanding the concept of a wallet address is fundamental for anyone interacting with crypto. Just as one must know their bank account number to receive fiat funds, crypto investors must be aware of their wallet address. Whether trading Bitcoin, Ethereum, or any other digital asset, wallet addresses play a pivotal role in ensuring the secure and accurate transfer of tokens.
