A Practical Guide to Bitcoin Addresses

Table of Contents

• What is a Bitcoin Wallet Address?
• Bitcoin Address Format and Examples
• How to Find or Generate a Bitcoin Address
• Checking Your Bitcoin Address on a Block Explorer
• Why Bitcoin Addresses Change
• Understanding Bitcoin Address Collisions
• Bitcoin Address Prefixes (Legacy, SegWit, Bech32)
• How to Use SegWit Addresses
• SegWit Adoption Trends

What is a Bitcoin Wallet Address?

A Bitcoin wallet address functions like a digital mailbox—a unique destination for receiving Bitcoin payments.

Key distinctions:

• Addresses are not public keys (they’re hashed derivatives).
• Addresses are not accounts (accounts aggregate multiple addresses).

👉 Learn more about Bitcoin wallet security here

Bitcoin Address Format and Examples

Bitcoin addresses typically start with:

• 1: Legacy (P2PKH)
• 3: Nested SegWit (P2SH-P2WPKH)
• bc1: Native SegWit (P2WPKH)

Examples:

• Legacy: 17VZNX1SN5NtKa8UQFxwQbFeFc3iqRYhem
• Nested SegWit: 3EktnHQD7RiAE6uzMj2ZifT9YgRrkSgzQX
• Native SegWit: bc1qw508d6qejxtdg4y5r3zarvary0c5xw7kv8f3t4

How to Find or Generate a Bitcoin Address

Locate your address under Receive, Deposit, or similar tabs in wallets/exchanges.

Supported Platforms:

• Exchanges: Coinbase, CashApp
• Wallets: Electrum, Ledger, Trezor
• Software: Bitcoin Core, Blockstream Green

👉 Compare wallet features and security

Checking Your Bitcoin Address on a Block Explorer

Block explorers like mempool.space or Blockstream let you:

• Track transaction history.
• Verify balances.
• Monitor fee rates.

Privacy tip: Use Tor or self-hosted explorers to avoid exposing your IP.

Why Bitcoin Addresses Change

Modern HD wallets generate new addresses per transaction to:

• Enhance privacy.
• Reduce address reuse risks.

Myth: "My address should stay static like an email."
Reality: Disposable addresses improve security.

Understanding Bitcoin Address Collisions

The odds of two users generating the same address are astronomically low (~1 in 2¹⁶⁰). Even if a collision occurs, funds are only accessible via the private key tied to that single address.

Bitcoin Address Prefixes

| Prefix | Type | Fee Savings | Compatibility |
|--------|------------|-------------|----------------|
| 1 | Legacy | None | Universal |
| 3 | Nested SegWit | ~40% | High |
| bc1 | Native SegWit | ~80% | Growing |

Recommendation: Upgrade to bc1 for maximum savings.

How to Use SegWit Addresses

1. Check compatibility with your wallet/exchange.
2. Transfer funds from legacy to SegWit addresses.
3. Enjoy lower fees for future transactions.

Steps for Ledger/Trezor:

• Add a SegWit account.
• Send BTC from legacy to new SegWit address.

SegWit Adoption Trends

Over 66% of Bitcoin transactions now use SegWit, reducing fees and improving scalability. Track adoption via TransactionFee.info.

FAQs

1. Can I reuse a Bitcoin address?

Avoid reuse—it compromises privacy. HD wallets automate address rotation.

2. What if my wallet doesn’t support bc1 addresses?

Use 3 (Nested SegWit) as a fallback.

3. Are Bitcoin addresses case-sensitive?

• 1/3: Yes.
• bc1: No.

Final Tip: Always test small amounts when switching address types.

Need help? Comment below or 👉 explore advanced wallet guides.