May 29, 2024

How to Create a Bitcoin Address

As Bitcoin continues to grow in popularity, understanding Bitcoin wallets and how to get a Bitcoin address becomes increasingly essential.

How to Create a Bitcoin Address

As Bitcoin continues to grow in popularity, understanding Bitcoin wallets and how to get a Bitcoin address becomes increasingly essential. This beginner's guide explores everything one needs to understand about Bitcoin addresses to get started, including what a wallet is, how addresses are created, and how bitcoin can be managed securely.

Understanding Bitcoin Wallets

A Bitcoin wallet is a digital tool that allows users to store, send, and receive bitcoin. When choosing a Bitcoin wallet, individual users should consider the various types of wallets available:


Determining the best type of Bitcoin wallet depends on its purpose: It may be that maximum security is most highly prioritized (e.g., hardware devices not connected to the Internet) or flexibility and ease of use (e.g., mobile apps). Many Bitcoin users have multiple wallets for multiple purposes. For instance, the private keys for long-term savings are best kept in a hardware wallet, whereas bitcoin that is more frequently spent may be kept in a mobile wallet.

Relationship Between Wallets and Addresses

A Bitcoin address is derived from a Bitcoin wallet's public key. Prior to creation of a Bitcoin address, a private key and a public key are generated. Every time someone requests a transaction, a new address can be generated. This practice is considered more secure than using the same address over and over again. Below is a diagram showing the relationship between a Bitcoin wallet and a Bitcoin address:

Bitcoin wallet ➡️ Creates Bitcoin private key ➡️ Derives Bitcoin public key from the private key ➡️ Generates Bitcoin address

How to Create a Bitcoin Wallet

Creating a Bitcoin wallet is straightforward. The easiest way to get started is by setting up a software or mobile wallet. In both cases, the user can:

  1. Download and Install
  • Visit the wallet’s official website (optionally, the App Store/Google Play Store for mobile wallets)
  • For desktop wallets:
  • Download the latest version that is compatible with your operating system.
  • Install the software following the on-screen instructions.
  • For mobile wallets: Download the latest version of the app
  1. Create a New Wallet
  • Upon opening either type of wallet software, there will be a prompt to create a new wallet.
  • Follow the setup instructions.
  1. Backup the Recovery Phrase
  • A recovery phrase (12 or 24 words known as a seed phrase) will be provided.
  • Write this down on a piece of paper or chisel it into metal and store it in a safe place.
  • Ensure the recovery phrase is never stored digitally to prevent hacking.
  1. Encrypt and Secure
  • If possible, set up a strong password to protect the wallet.
  • Consider enabling additional security features like 2FA if available.

Note: We recommend using Bitcoin only wallets given they typically offer increased security.

How to Get a Bitcoin Address

Generating a Bitcoin address is quick and simple:

  1. Access the Wallet
    • Open the wallet application.
  1. Generate Address
    • Navigate to the “Receive” section.
    • Copy the newly generated address—a string of alphanumeric characters.
  1. Share Address to Receive Payment
    • Send the address or share a QR code with the address to the person sending the payment

The Importance of Self-Custody

Self-custody means that an individual controls the bitcoin by securing their own private keys, without relying on custodial wallets managed by centralized exchanges.

Benefits of Self-Custody

  • Maximum Security: The user controls the private keys.
  • Avoid Third-party Risks: Protects against exchange hacks or outages.
  • Complete Control: The user can manage funds privately and independently.

While custodial wallets can have their place, bitcoin is much safer from catastrophe when held in self-custody using best practices. Self-custody is essential, especially for bitcoin that is allocated toward one’s long-term savings..

Safety of Sharing a Public Bitcoin Address

Sharing a public Bitcoin address is safe and necessary for receiving payments or donations:

  • Public Address: This can be shared publicly; it's simply an address format that others use to send funds to the person creating the address.
  • Private Key: This should NEVER be shared; it grants access to spend a user's funds.

Conclusion

Understanding how to create and manage a Bitcoin wallet is fundamental:

  1. Choose the correct type of wallet for the situation.
  1. Follow the steps to set up and back up the wallet securely.
  1. Embrace self-custody for improved control and security.

These steps will help users with their first experience with Bitcoin wallets and ensure that their bitcoin is secure. Select whichever wallet seems most appropriate and get started today!

About the author.