Definition:
Blockchain address is used to send and receive digital assets on the blockchain network. It is a string of text that identifies the source or destination specifically for each transaction. Each blockchain has wallet addresses that are generated by a cryptographic procedure on a computer.
The addresses can identify the cryptocurrency used. For example, all Bitcoin addresses start with 1, 3, or bc1. All Ethereum addresses start with 0x. Addresses can vary in length, but a bitcoin address is usually 34 characters long.
At the start of Bitcoin, it was possible to send and receive funds to an IP address, but this was discontinued after it became obvious that this method was vulnerable to hacking. Early bitcoin addresses are in the so-called P2PKH format and start at 1. They are also known as legacy addresses and tend to have higher transaction fees.
After that, P2SH addresses appeared. They start at 3 and support the Segwit update for the bitcoin blockchain. This removed the signature data on bitcoin transactions and led to lower fees for them. It also provided greater security through the use of multisig addresses, which require multiple keys to authorize a transaction on the bitcoin network. All addresses on Bybit are multisig.
The newest addition to Bitcoin addresses is Bech32. They are fully Segwit compatible. The advantage of these addresses is that they are not case sensitive, which means that they are less prone to typing errors. In addition, they have lower transaction fees than PS2H addresses. However, they are still not used very often.
Due to the transparent nature of blockchains, many addresses are widely circulated in the public, including those of Bitcoin's creator Satoshi Nakamoto. Whales that conduct large cryptocurrency transactions often share their addresses on social media. In addition, an increasing number of people from different walks of life are publicly exchanging addresses as a means of receiving payments for their services.
Some may confuse the blockchain address and wallet. The address is, in fact, an invoice for a transaction on the blockchain network. On the other hand, a wallet is where you keep your funds. These can be hot wallets (online) or cold wallets (offline). Thus, a wallet can have multiple addresses.
