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What is a Bitcoin address?
Updated over 5 months ago

A Bitcoin address is comparable to a bank account number that you can share publicly. Anyone who knows your Bitcoin address can send you Bitcoin there - just like anyone who knows your IBAN can send you money there. However, there are a few important differences to the IBAN:

  • The Bitcoin address is not assigned by a central organization such as a bank, but is created automatically by the Bitcoin wallet software.

  • The Bitcoin address consists only of numbers and letters and has no information about the country where the payment is going or the owner.

  • The Bitcoin address can only be used to carry out Bitcoin transactions. It cannot be used to make payments with other currencies or financial services.

There are different address formats for Bitcoin wallets, we will keep the explanation here deliberately short.

Legacy format - P2PKH - Example: 1FeexV6bAHb8ybZjqQMjJrcCrHGj99b6uF

SegWit format - P2SH - Example: 39F2Me9NeS25Bu1mqpmR338k3dPdA9RTzn

Native SegWit format - Bech32 - Example: bc1q2wzgjz24x56x8z20yzt9vggywsxagg6q820d6k

Pay-to-Taproot - P2TR - Example: bc1pszwdz79sd2nze5gd3jujj93l88l6q7zapkld9xxm8qrzjtkn0rfs8s8848

Your Bitcoin wallet can manage many different Bitcoin addresses, and most wallets even generate a new Bitcoin address for each transaction for security reasons. To use Bitcoin, you need a so-called "Bitcoin wallet", which is a digital wallet. The wallet manages your Bitcoin addresses and allows you to send and receive Bitcoin.

It is important that you always check carefully whether you have entered the correct BTC address. If you swap just one character and send your Bitcoin, the Bitcoin is gone. This is because with a decentralized system like Bitcoin, there is no support hotline or similar. Once a transaction has been made, it can no longer be reversed.

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