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Crypto address
Definition: A unique string of characters that represents a destination for a cryptocurrency payment.
Explanation: A crypto address functions similarly to an email address but is used for receiving cryptocurrency transactions. It is a critical component in the process of sending and receiving cryptocurrency. Each address is unique to a particular wallet and can be shared publicly to receive funds. It is usually derived from the public key through a process of cryptographic hashing.
Example: Bitcoin addresses often start with a “1”, “3”, or “bc1” and look something like this: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.
Key Points
- Public and Private Keys: A crypto address is associated with a pair of keys—a public key (which can be shared and used to generate the address) and a private key (which must be kept secret and is used to sign transactions).
- Format: The format of the address can vary depending on the cryptocurrency. For instance, Bitcoin addresses can be in Legacy (P2PKH), SegWit (P2SH), or Bech32 formats.
- Use: To send funds to someone, you need their crypto address. To receive funds, you provide your address to the sender.
- Security: Addresses themselves are secure as long as the corresponding private key is kept confidential. Losing access to the private key means losing access to the funds associated with that address.
Example Addresses for Different Cryptocurrencies
- Bitcoin (BTC):
1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa - Ethereum (ETH):
0x32Be343B94f860124dC4fEe278FDCBD38C102D88 - Litecoin (LTC):
LcHKpYV1fCh1eE6nGRjXYdi58SK1SpBsyV
Related Terms
- Wallet: A digital tool (software or hardware) that stores and manages cryptocurrency addresses and private keys.
- Private Key: A secret key used to sign transactions and access funds associated with a crypto address.
- Public Key: A cryptographic key used to generate the crypto address and receive funds.
Understanding crypto addresses is fundamental to engaging with cryptocurrencies, as they are the primary means of facilitating transactions on a blockchain.
