This short post contains common misconceptions around what is in a wallet, how does a wallet differ from an address and what exactly goes into creating an address. This is a work in progress…and more clarifications will continue to be added to this bitcoin wallet basics post….

Difference between Wallet and Wallet Address

A wallet contains both your private and public key  (saved together as a “pair”).

The private key is used for spending your bitcoin (i.e. SENDING btc). The public key is used for receiving payments. The private key is randomly generated and the public key is derived from the private key.  A total of 2 ^ 160 public keys are possible.

The wallet address is just a hash of the public key.  This is something you would share with the world – to receive your bitcoin in.

What does a wallet address look like?

sample bitcoin wallet address
sample bitcoin wallet address

There are three things that make up this address:

  1. The encoded id of the network (testnet, mainnet…)
  2. A hash of the bitcoin owner’s public key
  3. A checksum for checking the validity of data.

Where are the addresses stored on the bitcoin network?

When you create an address, it is stored in your wallet, and that’s it. It is not recorded on the underlying bitcoin blockchain until a transaction, involving that address, is sent out.

Anuj holds professional certifications in Google Cloud, AWS as well as certifications in Docker and App Performance Tools such as New Relic. He specializes in Cloud Security, Data Encryption and Container Technologies.

Initial Consultation

Anuj Varma – who has written posts on Anuj Varma, Hands-On Technology Architect, Clean Air Activist.

 Twitter Linkedin