Many new users still struggle with the creation of a Bitcoin wallet, despite the availability of numerous wallet providers. The most popular options are mobile, hardware, and cryptocurrency exchange wallets, but watch out for fakes and scams.
Several cryptocurrency wallets allow users to create multiple Bitcoin addresses, but only a few cryptocurrency exchanges include this feature.
If you are getting started in Bitcoin and cryptocurrency, your first challenge is to find a safe, secure way to store your cryptocurrencies.
There are many providers of Bitcoin wallets available today. Using these, you can create a Bitcoin address (also known as a public key) that can be used to send and receive Bitcoin (BTC). Additionally, some of these wallets provide access to the private keys (basically the key that controls the public address), which means you can easily move your funds into another wallet if necessary.
Do not mix up your public and private keys-don’t give out your private key, as anyone with access to this can control your funds.
Basically, a Bitcoin address is the public identifier for your Bitcoin wallet, and it serves as a virtual location where the cryptocurrency can be sent.
You receive a public key and a private key when you create a Bitcoin wallet. The private key enables you to prove ownership of the wallet in question, and the public key facilitates the transfer of funds. Asymmetric encryption lets the public key and private key be linked; the private key can be used to obtain the public key, but the public key can’t provide the private key. It is for this reason that you shouldn’t share your private key.
Bitcoin addresses aren’t exactly the same as your public key. Instead, they’re a temporary, hashed version of it. In the address itself, there are between 26 and 35 alphanumeric characters; the addresses are often translated into QR code format for ease of sharing. Every time a new transaction is initiated, the recipient generates a new single-use address and then transmits it to the sender.
Bitcoin addresses examples
According to the above, Bitcoin addresses have between 26 and 35 alphanumeric characters. You can create three different types of Bitcoin addresses: P2PKH (Pay-to-PubKey-Hash, also called Legacy Address), P2SH (Pay-to-Script-Hash), and BCH32 (Back-end 32-bit Address). Some wallets do not support all three address formats.
Addresses for P2PKH
P2HK addresses are the original Bitcoin address format. They are also known as Legacy addresses. P2HK addresses start with 1, and they are case sensitive. A wallet should support legacy addresses; it should be possible to receive bitcoin from a Segwit address to a legacy address. Transaction fees for P2PKH addresses are generally higher.
Addresses of P2SH
The structure of Nested SegWit addresses is similar to that of P2PKH addresses, except they start with a 3 instead of a 1. A new format was introduced to support the SegWit, or segregated witness, update to the Bitcoin protocol, which separated signature data from transaction data-thereby reducing the amount of data stored in blocks of Bitcoins.
Essentially, this means P2SH addresses have lower transaction fees. Their purpose is to act as a half-way house between Legacy and Native SegWit addresses, supporting both types of transactions. The addresses also offer greater functionality than legacy addresses, like multisig addresses (which require multiple digital signatures to be authorized).
Addresses of Bech32
SegWit addresses, or Bech32 addresses, start with “bc1” and are case-insensitive. Native SegWit addresses enable SegWit transactions, which results in lower transaction fees-but not all exchanges and wallet providers support them.