Addresses & keys
An address is where bitcoin gets sent. A private key is what lets it be spent again. Confusing the two is the most expensive mistake in bitcoin, so this section separates them carefully.
The mechanism runs one way. A private key is a very large random number. Public key cryptography derives a public key from it, and an address is derived from that. Publishing an address therefore tells the world nothing useful about the key behind it. Lose the key and no support desk can regenerate it, because nobody else ever had a copy.
Modern wallets never ask you to handle keys one at a time. A hierarchical deterministic wallet turns a single seed into an unlimited tree of keys along a derivation path, which is why one twelve or twenty four word backup restores an entire wallet and every address it ever used. It is also why extended public keys matter: hand one to the wrong service and you have given away your whole transaction history without giving away a single coin.
Address formats have changed over the years, from legacy through SegWit to Taproot, and the format you use changes what your transactions cost. Those entries sit here alongside address reuse and change addresses, the two habits that quietly leak the most privacy.
40 terms. Last reviewed 2026-09-24.
Terms in Addresses & keys
- Address reuseAddress reuse means accepting more than one payment at the same bitcoin address, which publishes a permanent public link between everyone who has ever paid you there.
- Base58Checkalso Base58Base58Check is bitcoin's original text encoding, which turns binary data into a string of 58 easily transcribed characters and appends a four byte checksum to catch typos.
- Bech32Bech32 is the address encoding behind bc1q strings, a lowercase base32 format whose six-character checksum detects any error affecting up to four characters.
- Bech32mBech32m fixes a flaw in bech32 by changing one constant in the checksum, and every Taproot address starting bc1p uses it instead of the original encoding.
- BIP-44 purpose levelThe BIP-44 purpose level is the first number in an HD derivation path, hardened and fixed at 44', which claims the whole subtree beneath it for one wallet standard.
- BIP-49 derivationBIP-49 derivation puts nested SegWit accounts on their own branch at m/49'/0'/0', so a wallet that cannot read them shows nothing rather than a wrong balance.
- BIP-84 derivationBIP-84 derivation is the scheme that sets the purpose level of a BIP-32 path to 84', so one seed phrase yields native SegWit bc1q addresses using the P2WPKH encapsulation from BIP-141.
- BIP-86 derivationBIP-86 derivation puts single key Taproot accounts at m/86'/0'/0', then tweaks each derived key with its own hash so the address commits to an unspendable script path.
- Bitcoin addressalso AddressA bitcoin address is a short encoded string that tells a sender's wallet which locking condition to put on the coins, so only your keys can later spend them.
- Chain codeA chain code is the 32 bytes of extra entropy carried alongside each key in an HD wallet, mixing into every child derivation so keys cannot be guessed from their siblings.
- Change addressalso Change outputA change address receives the part of an input your wallet did not spend, because bitcoin outputs are consumed whole and any remainder has to go somewhere.
- Child keyalso Child public key, Child private keyA child key comes out of a derivation step rather than a random number generator, identified by the index its parent used to produce it.
- Compressed public keyA compressed public key stores only the x coordinate of a curve point plus a one byte parity flag, fitting a full public key into 33 bytes instead of 65.
- Derivation pathA derivation path is the route through an HD wallet's key tree, written like m/84h/0h/0h/0/0, that tells software exactly which key of billions to rebuild from your seed.
- Extended keyalso xpub, xprv, Public extended key, Private extended keyAn extended key pairs an ordinary bitcoin key with a 32-byte chain code, and that pair is what lets software derive an entire branch of keys below it.
- Hardened derivationalso Hardened extended keyHardened derivation feeds the parent private key into every child calculation, which is what stops a leaked extended public key from unraveling the branch beneath it.
- Hardened versus unhardened derivationHardened and unhardened derivation split BIP-32's child indices in half: unhardened children can be computed from an extended public key, hardened children cannot.
- HD walletalso HD protocol, Hierarchical deterministic wallet, BIP32An HD wallet grows every key it will ever need from a single random seed, arranged as the tree of parents and children that BIP-32 specified in 2012.
- Key fingerprintA key fingerprint is the first 32 bits of the Hash160 of a public key, printed as eight hex characters, and wallets use it to label which key a derivation path starts from.
- Key indexA key index is the number chosen at each step of an HD derivation, from 0 up to 4,294,967,295, that decides which child of a parent key you land on.
- Key pairA key pair is one private key together with the single public key it generates, the unit of ownership that every bitcoin signature and every multisig quorum is counted in.
- Legacy addressalso 1 addressA legacy address is a Base58Check string beginning with 1, the original bitcoin address format, and coins sitting in one cost the most to move.
- Master chain codealso Master private keyThe master chain code is the right half of the 64 byte hash of your seed, the companion to the master private key that sits at depth zero of an HD wallet tree.
- Nested SegWitalso Wrapped SegWit, P2SH-P2WPKH, 3 addressNested SegWit wraps a native SegWit key hash inside a P2SH address, buying compatibility with software that could not read bc1 strings, at about 23 extra vbytes per input.
- NUMS pointA NUMS point is a public key nobody holds the private key for, used as a taproot internal key when the cooperative spending path is meant to be impossible.
- Output descriptoralso Descriptor, Descriptor walletAn output descriptor is a single line of text that states which script type, which keys and which derivation branch a wallet should use, with a checksum on the end.
- P2PKH addressalso Pay-to-Public-Key-Hash, P2PKH outputP2PKH is the output type that locks coins to a 20-byte hash of a public key, so the key itself stays hidden until the moment you spend.
- P2SH addressalso Pay-to-Script-Hash, P2SH outputA P2SH address begins with 3 and commits to the hash of a redeem script, so the spending conditions stay secret until someone reveals the script.
- P2SH multisigP2SH multisig hides an m-of-n redeem script behind a 3 address, and the 520-byte script cap limits it to fifteen public keys.
- P2TRalso Taproot address, Pay-to-Taproot, bc1p addressP2TR pays to a single 32-byte tweaked public key, so a key spend looks identical on-chain whether one person signed or a complicated contract settled cooperatively.
- P2WPKHalso Native SegWit address, Pay-to-Witness-Public-Key-Hash, bc1q addressP2WPKH moves the signature and public key out of the input and into the witness, where each byte counts one weight unit instead of four.
- P2WSHalso Pay-to-Witness-Script-HashP2WSH locks coins to a 32-byte SHA-256 commitment to a witness script, giving contracts far more room than P2SH and a discount on the script when it is revealed.
- Parent keyalso Parent public key, Parent private keyThe parent key sits one level directly above another key in an HD wallet's tree, and every extended key carries four bytes that fingerprint its own parent.
- Private keyA private key is the 256-bit secret number that authorizes spending from a bitcoin output; anyone who learns it can move the coins, and nobody can reissue it.
- Public keyA public key is the point on the secp256k1 curve derived from your private key, publishable without risk, and the value a signature is checked against when you spend.
- Uncompressed public keyAn uncompressed public key writes out both coordinates of a curve point behind a 0x04 prefix, taking 65 bytes, and survives today mainly in keys generated before 2012.
- Unique addressA unique address appears in exactly one payment and is never handed out again, which is how every wallet built on BIP-32 behaves by default.
- Vanity addressA vanity address spells out a chosen word or prefix in its own characters, found by grinding through random keys until one of them encodes the pattern.
- Wallet Import Formatalso WIFWallet Import Format is the Base58 encoding used to move a single private key between wallets, wrapping the raw 32 bytes with a network byte and a checksum.
- Watch-only addressalso Watch-only walletA watch-only address lets software follow a balance without holding the private key, so you can see every payment arrive and still cannot move a satoshi.
The other 13 sections
- BasicsWhat bitcoin is, what a satoshi is, and the handful of ideas the rest of the glossary is built on.
- Wallets & custodyHot, cold, custodial and multisig, and what each one changes about who can move your coins.
- Privacy & securityThe attacks that take people's bitcoin, and the habits and tools that stop them.
- Transactions & feesWhat a bitcoin transaction is made of, why it costs what it costs, and how to unstick one.
- Buying & exchangesOrder types, spreads and fee schedules: the vocabulary an exchange uses while it is charging you.
- Markets & investingMarket cap, volatility and spot ETFs. The language of price, without the price predictions.
- Mining & consensusHow new blocks get made, what difficulty adjusts, and why the rules hold with nobody in charge.
- Protocol & upgradesSegWit, Taproot, soft forks and BIPs: how bitcoin changes and who gets to decide.
- Lightning & layer 2Payment channels, invoices and routing, for moving bitcoin without paying for space in a block.
- Regulation & taxKYC, the Travel Rule, MiCA and capital gains: the rules that reach your account and your tax return.
- Culture & historyMt. Gox, the genesis block, HODL, and the events and slang that shaped how people talk about bitcoin.
- Nodes & softwareBitcoin Core, full nodes, pruning and RPC: the software that enforces the rules.
- Developer referenceP2P message types, opcodes and script terms: the field names you meet reading bitcoin code.
Frequently asked questions
What is the difference between an address and a private key?
An address is where coins are sent, and sharing it is safe. A private key is what spends them, and sharing it loses them permanently. Every scam in this space eventually asks for the second while calling it the first.
Why does my wallet show a different address every time?
Because reusing one address links all your payments together on a permanently public ledger. Wallets generate a fresh address for each payment from the same seed, so every one of them is still yours and still recoverable from the same backup.
If I lose my recovery phrase, can anyone help me?
No. There is no reset, no support desk, and no recovery service that is not a scam. The phrase is the wallet. Write it on paper, keep it away from every screen and camera, and store a second copy somewhere a fire would not reach.
What is a derivation path and do I need to care about it?
It is the route from your seed to one specific set of keys, written in a form like m/84h/0h/0h. Most of the time you can ignore it. If you restore into a different wallet and the balance looks wrong, a mismatched path is usually the reason.