Wallets and Addresses
Wallets
A wallet in cryptocurrency is an application or device that can generate a private key and address pair. This allows you to receive and send cryptocurrencies. Wallets read from the blockchain and broadcast transactions to it. The wallet generates a transaction from your address then uses your private key to sign it. Some wallets can generate multiple addresses to a single private key. The private key generated is never to be shared, if that is lost or stolen, all your funds are gone.
To send Bitcoin you need the address you want to send it to. Nothing can stop you from sending or receiving Bitcoin. Once Bitcoin is sent, it cannot be undone. When sending payments double-check the address you’re about to send to. If you mistake leaving a character off or send it to an address of a different blockchain, You Will Lose Your Bitcoin. It cannot be stressed enough to be careful and take your time, double-check and use copy-paste. Ensure you have the right address.
Pro Tip: send a small amount to a new address, once you confirm its' arrival, send the rest. You will pay fees twice since it's two transactions, but the assurance is worth it when starting with cryptocurrencies.
An address is how you receive crypto such as Bitcoin, also known as a public address. It is safe to give out your address as only the private key owner (24-word phrase) can spend from that address. Once Bitcoin is sent to a Bitcoin address, the owner of the receiving address will have complete control of those funds. In Bitcoin, there are three types of addresses, P2PKH, P2SH, and Bech32. Bech32 is 3rd generation address because it saves the most on transaction fees. Bech32 is also called bc1 for short. Below is an example of each address type.
Bech32 addresses are 3rd generation and start with bc1.
Example: bc1qu0q29jkfae0y2lyzashd6c7h0elqqk6ctkvm7r
P2SH addresses are 2nd generation and start with the number 3.
Example: 3ApnyPtC7KcboBr8jBkYP8U1YiX8sNsc4A
P2PKH addresses are 1st generation and begin with the number 1.
Example: 14tubqZEUXQb2DMRCxDZVyXavareqtfgWx
The old types of addresses still work but can cost more in the transaction(Tx) fees. Some exchanges still use P2PKH or P2SH, don’t worry, all three are compatible with each other. Generate a Bech32 address where you can.
Take your time learning about Bitcoin and other cryptocurrencies. Scammers prey on ignorance.