Public Address

Bitcoin is incomplete without cryptography.

Cryptography is what enables transactions and controls the creation of new BTC. In a nutshell, it uses mathematics to secure trust and decentralization. As an essential component of this cryptographic landscape, Bitcoin public addresses emerged.

Every time you want to send or receive BTC, you have to deal with a “public key pair” (public key and private key) — a cryptographic mumbo-jumbo that serves as the home for all your BTC deposits.

However, most newbie crypto investors are still unfamiliar with the concept of a Bitcoin public address because of custodial exchanges that take care of it on their behalf. While convenient, the investors are never the “true owners” of their assets.

This article explains what is a Bitcoin address so you can purchase BTC, engage in DeFi activities and practice self-custody of your cryptocurrencies.

Why is a Cryptographic Address Important?

Cryptographic addresses, such as Bitcoin addresses, are crucial for digital currency security and functionality. They serve as the cornerstone for the blockchain network’s secure and transparent peer-to-peer transactions.

These addresses are produced by a series of cryptographic functions and serve many important roles.

• Security: Cryptographic addresses are the gateway to send, receive and manage assets on the blockchain.
• Privacy: Cryptographic addresses aid in the preservation of user privacy. Because these addresses are not directly linked to personal information or identities, they provide pseudonymity.
• Transaction Routing: Cryptographic addresses ensure that funds in the blockchain network are transported correctly. They are used to identify the source and destination of Bitcoin transactions.
• Ease of Use: Cryptographic addresses make it easier to receive and send digital currency. Users can easily use their public addresses to accept payments from others, similar to how a traditional bank account number can be shared to receive deposits.

While Bitcoin transactions are traceable, the identity can still be kept away from prying eyes.

What is a Bitcoin Address

A Bitcoin public address is a one-of-a-kind identifier that typically consists of 26 to 35 alphanumeric characters. It is used on the Bitcoin network to send and receive bitcoins. Consider it the receiving point for your digital wallet, similar to an email address for cryptocurrency.

Technical Breakdown

Structure of a Bitcoin Public Address

Understanding the structure of a Bitcoin public address is critical to understanding how it works. A Bitcoin address is made up of three main components:

1. Prefix: The prefix is the first section of a Bitcoin address that consists of 26-35 alphanumeric characters and is used to identify the network and version.
2. Payload: This component of the address contains the real data, including the public key hash, which is essential for transaction security.
3. Checksum: A checksum in a Bitcoin address is a value computed from the address’s payload to verify its integrity and detect errors in data entry or transmission.

Let’s look at Bitcoin address example:

Bitcoin Address: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2

In this example:

• Prefix: “1”
• Payload: “BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN”
• Checksum: “2”

The prefix “1” is always the same for standard Bitcoin addresses, and the payload contains the variable data, including the public key hash. The checksum helps ensure the address’s integrity.

Generation Process

The method of generating a Bitcoin public address involves converting a private key to a public key, followed by a number of hashing processes that are crucial for security.

• From Private Key to Public Key: The process starts with the creation of two cryptographic keys: a private key and a public key. The private key is created first which is plugged into a one-way cryptography function that spits out the public key.

• Hashing Processes (SHA-256 & RIPEMD-160): The public key is subjected to a number of mathematical modifications. First, it is hashed with the SHA-256 (256-bit Secure Hash Algorithm). This yields a 256-bit hexadecimal number with a fixed length. A second hashing step employing RIPEMD-160 (RACE Integrity Primitives Evaluation Message Digest 160-bit) is used to improve security and make addresses more manageable. The result is a smaller, 160-bit number. 160 digits are still too long.

• Base58Check Encoding: Finally, Bitcoin addresses go through Base58Check encoding to make them more user-friendly. To prevent potential errors in manual entries, this encoding turns 1’s and 0’s to alphanumeric characters.

That is how to get a Bitcoin address.

You can even find free Bitcoin address generator tools online.

Address Formats

There are multiple formats of Bitcoin public addresses. Each plays a specific role within the Bitcoin ecosystem.

• P2PKH: Pay-to-Public-Key-Hash (P2PKH) addresses begin with ‘1’ and are commonly used for individual Bitcoin transactions.
• P2SH: Pay-to-Script-Hash (P2SH) addresses start with a ‘3’ and are frequently connected with complicated transaction scripts and multi-signature setups.
• Bech32: Bech32 addresses, which begin with ‘bc1,’ are a more current format that is optimized for Segregated Witness (SegWit) transactions, which offer lower fees and increased efficiency.

P2PKH addresses are ideal for regular, individual Bitcoin transactions, making them a practical choice for daily use.

For advanced capabilities such as SegWit compatibility, enhanced security, and access to witness programs, Bech32 addresses offer different advantages such as lower fees and increased efficiency.

P2SH addresses are a viable option for more sophisticated transaction scenarios including multi-signature setups, or older Bitcoin software compatibility. These addresses begin with ‘3’ and support a greater range of transaction types.

Useful links

• Address poisoning attacks
• What is an STO
• What is a Blockchain Nonce
• What is a stablecoin
• What does Ngmi mean

Bitcoin Blockchain Explorer

A Bitcoin blockchain explorer (a.k.a. block explorer) helps you deep dive into the nitty-gritty of what’s going on in the network — from currency flows to contract interactions.

This is useful for tracing payments, verifying transactions, or simply studying the network activity.

Blockchain.com, for example, is one of the most popular Bitcoin block explorers. Let’s have a look at this explorer to see how it works.

• Visit the Website: Go to Blockchain.com Explorer.
• Enter the Address: In the search bar, enter the Bitcoin address you want to explore and hit “Search.”
• Explore Address Details: You’ll be given an overview of the address, including its balance, transaction count, and other details.
• Transaction History: Scroll down to see a list of recent address-related transactions. You may receive more information about each transaction by clicking on it.
• Graphical Representation: Blockchain.com displays a graphical representation of transaction history, allowing you to see how Bitcoin has moved in and out of the address.
• Other Features: On the platform, you may also explore blocks, check data, and access extra tools and information.

Block explorers are extremely valuable for transparency and accountability, they are public tools that anybody may use to investigate Bitcoin transaction details.

A common concern for newbies is the privacy around block explorers.

A block explorer only displays publicly available information, i.e., what’s on the blockchain’s ledger (perform a Bitcoin address lookup). Your private key remains safe and unseen.

How is a Bitcoin Public Address/Key Used?

When you want to accept Bitcoin from someone else, you provide them with your Bitcoin address. That is how to add money to your Bitcoin wallet.

This address is derived from your public key and is the recipient of incoming payments. The public key is a mathematical equivalent to your private key and is required for the creation of this address.

When a Bitcoin transaction is received, the sender generates a digital signature, which is effectively proof of ownership and intent to transfer the specified amount of Bitcoin. Your public key is used to validate this signature. The Bitcoin network utilizes your public key to validate the transaction and ensure that it was signed by the corresponding private key, which only you have.

In brief, the role of the public key is to provide a secure and transparent method of verifying the legitimacy of incoming transactions. This method enables the Bitcoin network to verify ownership, prevent double-spending, and ensure the integrity of the entire blockchain, making it a critical component of the cryptocurrency’s functionality.

Bitcoin Address Examples

P2PKH (Pay-to-Public-Key-Hash)

• Format: Addresses start with the number ‘1.’
• Example: 1Awyd1QWR5gcfrn1UmL8dUBj2H1eVKtQhg

P2SH (Pay-to-Script-Hash)

• Format: Addresses start with the number ‘3.’
• Example: 3QJmV3qfvL9SuYo34YihAf3sRCW3qSinyC

Bech32

• Format: Addresses start with ‘bc1.’
• Example: bc1q42kjb79elem0anu0h9s3h2n586re9jki556pbb

Taproot (BC1P)

• Format: Addresses start with ‘bc1p.’
• Example: bc1pqm4pxgs90ywjpx7u8muj9lsrxcgmpayl94udx4zqey4s89e0k76sjefsk

How to Find the Public Address of Your Wallet

Finding your Bitcoin wallet’s public address is fairly straightforward, and varies depending on the kind of wallet you are using.

Software Wallets

If you’re using a software wallet, such as Electrum, Bitcoin Core, or Exodus, use the following steps to get your public address:

• Launch the wallet software.
• Look for the “Receive Bitcoin” or “Receive” option.
• Your public address will appear as a lengthy alphanumeric string. Usually, you may copy it to your clipboard for quick sharing.

Hardware Wallets

Hardware wallets such as the Ledger Nano S and Trezor offer a safe place to keep your Bitcoin. To find your public address, use the following method:

• Connect a computer or mobile device to your hardware wallet.
• Navigate to the “Receive” space by following the device’s instructions.
• Your public address will be shown and ready to use.

Security Implications

Bitcoin public addresses play an important role in the security of your Bitcoin transactions. Understanding the ramifications of address reuse and possible quantum computing attacks is critical for protecting your assets.

• Pseudonymity: Bitcoin provides some privacy, but it is critical to recognize its pseudonymous character. The blockchain records transactions, creating a transparent history.
• Address Reuse Concerns: Reusing Bitcoin addresses can put your privacy and security at risk. It is best to create new addresses for each transaction. Hardware wallets, like Trezor, solve this through Hierarchical Deterministic wallets.
• Quantum Computing Threats: The advent of quantum computing raises concerns about the cryptographic security of Bitcoin. To mitigate these hazards, precautions, and modifications to the cryptographic algorithms employed in Bitcoin are required.

Using the Paybis Bitcoin Wallet

For anyone wishing to explore the world of cryptocurrencies and secure their digital assets, the Paybis Bitcoin wallet is an option.

Our user-friendly wallet provides a seamless experience for both novice and advanced users.

Users can create and access their wallet on Paybis by just registering and logging in on the Platform. The wallet is completely free and it is not mandatory for users to purchase crypto only via Paybis.

All deposits in the wallet are secure and can be verified via any blockchain explorer. Paybis will never use users’ funds.

Final Words

Public keys are the foundation of secure, private, and trustworthy peer-to-peer transactions, providing unparalleled financial liberty.

By diving into the complexities of address structure, formats, and their relevance, you can effectively navigate the world of digital assets.

Remember that while public addresses are safe to share, your private key is the actual defender of your financial security.

Learn more about keeping your Bitcoins secure and navigating web3 via the Paybis blog.