The differences between several addresses of digital currency wallets

Digital currency wallets have different address types, including: Receiving address: used to receive funds, and each transaction generates a new address. Sending address: used to send funds. Multi-signature address: multiple private keys are required to unlock, enhancing security. Cold storage address: offline storage, high security. Hot storage address: online storage, highly convenient. BIP32 address: deterministic wallet generation, providing unlimited receiving addresses. Segregated Witness Addresses: Improving transaction efficiency and privacy. Taproot address: Provides more flexible and efficient transactions.

Address types of digital currency wallets

In digital currency wallets, different address types are used to meet different purposes. There are mainly the following types:

• Receiving address: used to receive digital currencies from other wallets. Each transaction generates a new receiving address.
• Sending address: used to send digital currency to other wallets. The sending address is the address in the wallet used to create the transaction.
• Multi-signature address: Multiple private keys are required to unlock and use. This provides additional security and authorization flexibility.
• Cold storage address: Address stored on an offline device (such as a hardware wallet). This provides greater security as the private key is not exposed to the network.
• Hot Storage Address: The address stored on the device connected to the Internet. This provides convenience, but less security.
• BIP32 Address: Using deterministic wallet generation, each private key derives multiple sub-private keys and sub-public keys to generate an unlimited number of receiving addresses.
• Segregated Witness Address (BIP173): Use Segregated Witness technology to improve transaction throughput and privacy.
• Taproot address (BIP341) : Uses Merkle tree structure to provide more flexible and efficient transactions.

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