Difference between revisions of "Invoice address"

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A '''Bitcoin address''', or simply '''address''', is an identifier of approximately 33 alphanumeric characters, always beginning with the number 1, that represents a possible destination for a Bitcoin payment. Addresses can be generated at no cost by any user of Bitcoin. For example, using the Bitcoin software, one can click "Get Address" and be assigned an address.  It is also possible to get a Bitcoin address simply by creating an account at an exchange, to which a Bitcoin address will be automatically assigned.
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A '''Bitcoin invoice address''', or simply '''invoice''', is an identifier of 26-35 alphanumeric characters, beginning with the number <code>1</code>, <code>3</code> or <code>bc1</code> that represents a possible destination for a bitcoin payment.
 +
Invoices can be generated at no cost by any user of Bitcoin.
 +
It is also possible to get a Bitcoin invoice address using an account at an exchange or online wallet service.
  
An example of a Bitcoin address is ''175tWpb8K1S7NmH4Zx6rewF9WQrcZv245W''.
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There are currently three [[List_of_address_prefixes|invoice address formats]] in use:
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# [[Transaction#Pay-to-PubkeyHash|P2PKH]] which begin with the number <code>1</code>, eg: <code>1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2</code>.<!-- tails donation address -->
 +
# [[Pay_to_script_hash|P2SH]] type starting with the number <code>3</code>, eg: <code>3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy</code><!-- anyone-can-spend, null script -->.
 +
# [[Bech32]] type starting with <code>bc1</code>, eg: <code>bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq</code>.<!--some example LN wallet-->
  
==A Bitcoin address is like an e-mail address==
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==A Bitcoin invoice address is a single-use token==
Like e-mail, you can send Bitcoins to a person by sending Bitcoins to their address. Somewhat unlike e-mail, one person can, and is encouraged, to have an unlimited number of different Bitcoin addresses.  It is recommended that you use a unique address for each transaction. Most Bitcoin software and websites will help with this, by generating a brand new address each time you perform a transaction, or will provide a button you can click for a new one.
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Like e-mail addresses, you can send bitcoins to a person by sending bitcoins to one of their invoice addresses.
 +
However, ''unlike'' e-mail addresses, people have many different Bitcoin invoice addresses and [[Address reuse|for privacy and security reasons]] a unique invoice should be used for each transaction.
 +
Most Bitcoin software and websites will help with this by generating a brand new invoice each time you create an invoice or payment request.
  
When using a web site that accepts Bitcoins or holds Bitcoin balances on your behalf, that website will assign a Bitcoin address to your account, so you can transfer funds into your account at the site. Very much unlike e-mail, this address will probably change every time funds come in, but the previous addresses will usually remain permanently valid for receiving additional funds.  When you send Bitcoins to your account at a web site, they will usually be credited to your account at that web site within an hour (depending on the site's policy) to ensure that the transaction is [[confirmation|confirmed]].
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A naive way to accept bitcoin as a merchant is to tell your customers to send money to a single invoice address. However this does not work because Bitcoin transactions are public on the [[block chain]], so if a customer Alice sends you bitcoins then a malicious agent Bob could see that same transaction and send you an email claiming that he paid. You would have no way of knowing whether it was Alice or Bob who send coins to your invoice. This is why each customer must be given a brand new invoice.
  
==Addresses can be created offline==
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==Invoices can be created offline==
Creating addresses can be done without any Internet connection or contact with the Bitcoin network. Creating addresses does not consume any resources on the network - the network only knows about an address when it is first used in a transaction. Because addresses can be created so easily and at no cost, it is trivial to create temporary "throwaway" addresses that can be discarded if never needed.
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Creating invoices can be done without an Internet connection and does not require any contact or registration with the Bitcoin network.
 +
It is possible to create large batches of invoices offline using freely available software tools.
 +
Generating batches of invoices is useful in several scenarios, such as e-commerce websites where a unique pre-generated invoice address is dispensed to each customer who chooses a "pay with Bitcoin" option.
 +
Newer [[Deterministic wallet | "HD wallets"]] can generate a "master public key" token which can be used to allow untrusted systems (such as webservers) to generate an unlimited number of invoices without the ability to spend the bitcoins received.
  
It is also possible to create large batches of addresses offline, using other software tools. Generating batches of addresses is useful in several scenarios, such as e-commerce websites where a unique pre-generated address is dispensed to each customer who chooses a "pay with Bitcoin" option.
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==Invoice addresses are often case sensitive and exact==
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Old-style Bitcoin invoice addresses are case-sensitive.  Bitcoin invoices should be copied and pasted using the computer's clipboard wherever possible. If you hand-key a Bitcoin invoice address, and each character is not transcribed exactly - including capitalization - the incorrect invoice address will most likely be rejected by the Bitcoin software.  You will have to check your entry and try again.
  
==Addresses are case sensitive and exact==
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The probability that a mistyped invoice is accepted as being valid is 1 in 2<sup>32</sup>, that is, approximately 1 in 4.29 billion.
Bitcoin addresses are case-sensitive. Bitcoin addresses should be copied and pasted using the computer's clipboard wherever possible.
 
  
If you hand-key a Bitcoin address, and each character is not transcribed exactly - including capitalization - the incorrect address will most likely be rejected by the Bitcoin client.  You will have to check your entry and try again.
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New-style [[bech32]] invoices are case insensitive.
  
The Bitcoin address format includes 32 error checking bits, so the probability that a mistyped address is accepted as being valid is 1 in 2<sup>32</sup> or about 1 in 4.29 billion.
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==Proving you receive with an invoice address==
 +
Most Bitcoin wallets have a function to "sign" a message, proving the entity receiving funds with an invoice has agreed to the message.
 +
This can be used to, for example, finalise a contract in a cryptographically provable way prior to making payment for it.
  
==Each address has a "private key"==
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Some services will also piggy-back on this capability by dedicating a specific invoice address for authentication only, in which case the invoice address should never be used for actual Bitcoin transactions.
For every visible address, there is a corresponding secret number known as a [[private key]].  When using a Bitcoin client, private key numbers are typically stored in the [[wallet file]].  The private key has a special purpose - it is mathematically needed to create transactions acceptable to the Bitcoin network that respend the funds originally sent to the address. If the private key to an address is lost (for example, in a hard drive crash and the user didn't have backups of the wallet file), any associated Bitcoins are lost forever.
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When you login to or use their service, you will provide a signature proving you are the same person with the pre-negotiated invoice address.
  
==What's in an address==
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It is important to note that these signatures only prove one receives with an invoice.
Most Bitcoin addresses are 33 characters.  They consist of random digits and uppercase and lowercase letters, with the exception that the uppercase letter "O", uppercase letter "I", lowercase letter "l", and the number "0" are never used to prevent visual ambiguity.  Bitcoin adheres to a rule of always using the number "1" as the first character - this allows visual discrimination from other types of random character strings that might look like Bitcoin addresses - such as [[private key]]s which start with "5", or coins from Bitcoin's [[testnet]] (which start with "m" or "n"), or coins from other cryptocurrency systems derived from Bitcoin's source code (which are not compatible with Bitcoin).
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Since Bitcoin transactions do not have a "from" address, you cannot prove you are the ''sender'' of funds.
  
Some Bitcoin addresses can be shorter than 33 characters. A significant percentage of Bitcoin addresses are only 32 characters - these are completely valid. Every Bitcoin address stands for a number - somewhat like an account number. These shorter addresses are valid simply because they stand for numbers that happen to start with zeroes, and when the zeroes are omitted, the encoded address gets shorter.
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Current standards for message signatures are only compatible with "version zero" bitcoin invoice addresses (that begin with the number 1).
 +
 
 +
==Invoice address validation==
 +
If you would like to validate a Bitcoin invoice address in an application, it is advisable to use a method from [https://bitcointalk.org/index.php?topic=1026.0 this thread] rather than to just check for string length, allowed characters, or that the invoice starts with a 1 or 3.  Validation may also be done using open source code available in [http://rosettacode.org/wiki/Bitcoin/address_validation various languages] or with an [http://lenschulwitz.com/base58 online validating tool].
 +
 
 +
==[[Multisignature|Multi-signature]] invoice addresses==
 +
Invoices can be created for keys that require a combination of multiple private keys.
 +
Since these take advantage of newer features, they begin with the newer prefix of 3 or bc1 instead of the older 1.
 +
These can be thought of as the equivalent of writing a check to two parties - "pay to the order of somebody AND somebody else" - where both parties must endorse the check in order to receive the funds.
 +
 
 +
The actual requirement (number of private keys needed, their corresponding public keys, etc.) that must be satisfied to spend the funds is decided in advance by the person generating this type of invoice, and once an invoice is created, the requirement cannot be changed without generating a new invoice.
 +
 
 +
==What's in an invoice==
 +
Most Bitcoin invoice addresses are 34 characters.
 +
They consist of random digits and uppercase and lowercase letters, with the exception that the uppercase letter "O", uppercase letter "I", lowercase letter "l", and the number "0" are never used to prevent visual ambiguity.
 +
 
 +
Some Bitcoin invoice addresses can be shorter than 34 characters (as few as 26) and still be valid.
 +
A significant percentage of Bitcoin invoice addresses are only 33 characters, and some invoices may be even shorter.
 +
Technically, every Bitcoin invoice stands for a number.
 +
These shorter invoices are valid simply because they stand for numbers that happen to start with zeroes, and when the zeroes are omitted, the encoded invoice address gets shorter.
 +
 
 +
Several of the characters inside a Bitcoin invoice are used as a checksum so that typographical errors can be automatically found and rejected.
 +
The checksum also allows Bitcoin software to confirm that a 33-character (or shorter) invoice is in fact valid and isn't simply an invoice with a missing character.
 +
 
 +
==Testnet==
 +
Invoice addresses on the Bitcoin Testnet are generated with a different prefix.
 +
See [[List of address prefixes]] and [[Testnet]] for more details.
 +
 
 +
==Misconceptions==
 +
===Address reuse===
 +
 
 +
Invoice addresses are not intended to be used more than once, and doing so has numerous problems associated.
 +
See the dedicated article on [[address reuse]] for more details.
 +
 
 +
===Address balances===
 +
 
 +
Invoice addresses are not wallets nor accounts, and do not carry balances.
 +
They only receive funds, and you do not send "from" an address at any time.
 +
Various confusing services and software display ''bitcoins received with an invoice address, minus bitcoins sent in random unrelated transactions'' as an "address balance", but this number is not meaningful: it does not imply the recipient of the bitcoins sent to the address has spent them, nor that they still have or don't have the bitcoins received.
 +
 
 +
An example of bitcoin loss resulting from this misunderstanding is when people believed their invoice address contained 3 BTC. They spent 0.5 BTC and believed the address now contained 2.5 BTC when actually it contained zero. The remaining 2.5 BTC was transferred to a "change address" which was not backed up and therefore lost. This has happened on a few occasions to users of [[Paper wallets]].
 +
 
 +
==="From" addresses===
 +
Bitcoin transactions do not have any kind of origin-, source- or "from" address. See the dedicated article on "[[From address|from address]]" for more details.
 +
 
 +
 
 +
==Address map==
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[[File:Address map.jpg|700px]]
  
Several of the characters inside a Bitcoin address are used as a checksum so that typographical errors can be automatically detected and rejected.
 
  
 
==See Also==
 
==See Also==
 
* [[Technical background of Bitcoin addresses]]
 
* [[Technical background of Bitcoin addresses]]
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* [[List of address prefixes]]
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* [[Exit Address]]
 +
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== References ==
 +
<references/>
  
 
[[Category:Vocabulary]]
 
[[Category:Vocabulary]]
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 +
[[es:Dirección]]
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[[de:Adresse]]

Latest revision as of 18:54, 23 October 2020

A Bitcoin invoice address, or simply invoice, is an identifier of 26-35 alphanumeric characters, beginning with the number 1, 3 or bc1 that represents a possible destination for a bitcoin payment. Invoices can be generated at no cost by any user of Bitcoin. It is also possible to get a Bitcoin invoice address using an account at an exchange or online wallet service.

There are currently three invoice address formats in use:

  1. P2PKH which begin with the number 1, eg: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.
  2. P2SH type starting with the number 3, eg: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy.
  3. Bech32 type starting with bc1, eg: bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq.

A Bitcoin invoice address is a single-use token

Like e-mail addresses, you can send bitcoins to a person by sending bitcoins to one of their invoice addresses. However, unlike e-mail addresses, people have many different Bitcoin invoice addresses and for privacy and security reasons a unique invoice should be used for each transaction. Most Bitcoin software and websites will help with this by generating a brand new invoice each time you create an invoice or payment request.

A naive way to accept bitcoin as a merchant is to tell your customers to send money to a single invoice address. However this does not work because Bitcoin transactions are public on the block chain, so if a customer Alice sends you bitcoins then a malicious agent Bob could see that same transaction and send you an email claiming that he paid. You would have no way of knowing whether it was Alice or Bob who send coins to your invoice. This is why each customer must be given a brand new invoice.

Invoices can be created offline

Creating invoices can be done without an Internet connection and does not require any contact or registration with the Bitcoin network. It is possible to create large batches of invoices offline using freely available software tools. Generating batches of invoices is useful in several scenarios, such as e-commerce websites where a unique pre-generated invoice address is dispensed to each customer who chooses a "pay with Bitcoin" option. Newer "HD wallets" can generate a "master public key" token which can be used to allow untrusted systems (such as webservers) to generate an unlimited number of invoices without the ability to spend the bitcoins received.

Invoice addresses are often case sensitive and exact

Old-style Bitcoin invoice addresses are case-sensitive. Bitcoin invoices should be copied and pasted using the computer's clipboard wherever possible. If you hand-key a Bitcoin invoice address, and each character is not transcribed exactly - including capitalization - the incorrect invoice address will most likely be rejected by the Bitcoin software. You will have to check your entry and try again.

The probability that a mistyped invoice is accepted as being valid is 1 in 232, that is, approximately 1 in 4.29 billion.

New-style bech32 invoices are case insensitive.

Proving you receive with an invoice address

Most Bitcoin wallets have a function to "sign" a message, proving the entity receiving funds with an invoice has agreed to the message. This can be used to, for example, finalise a contract in a cryptographically provable way prior to making payment for it.

Some services will also piggy-back on this capability by dedicating a specific invoice address for authentication only, in which case the invoice address should never be used for actual Bitcoin transactions. When you login to or use their service, you will provide a signature proving you are the same person with the pre-negotiated invoice address.

It is important to note that these signatures only prove one receives with an invoice. Since Bitcoin transactions do not have a "from" address, you cannot prove you are the sender of funds.

Current standards for message signatures are only compatible with "version zero" bitcoin invoice addresses (that begin with the number 1).

Invoice address validation

If you would like to validate a Bitcoin invoice address in an application, it is advisable to use a method from this thread rather than to just check for string length, allowed characters, or that the invoice starts with a 1 or 3. Validation may also be done using open source code available in various languages or with an online validating tool.

Multi-signature invoice addresses

Invoices can be created for keys that require a combination of multiple private keys. Since these take advantage of newer features, they begin with the newer prefix of 3 or bc1 instead of the older 1. These can be thought of as the equivalent of writing a check to two parties - "pay to the order of somebody AND somebody else" - where both parties must endorse the check in order to receive the funds.

The actual requirement (number of private keys needed, their corresponding public keys, etc.) that must be satisfied to spend the funds is decided in advance by the person generating this type of invoice, and once an invoice is created, the requirement cannot be changed without generating a new invoice.

What's in an invoice

Most Bitcoin invoice addresses are 34 characters. They consist of random digits and uppercase and lowercase letters, with the exception that the uppercase letter "O", uppercase letter "I", lowercase letter "l", and the number "0" are never used to prevent visual ambiguity.

Some Bitcoin invoice addresses can be shorter than 34 characters (as few as 26) and still be valid. A significant percentage of Bitcoin invoice addresses are only 33 characters, and some invoices may be even shorter. Technically, every Bitcoin invoice stands for a number. These shorter invoices are valid simply because they stand for numbers that happen to start with zeroes, and when the zeroes are omitted, the encoded invoice address gets shorter.

Several of the characters inside a Bitcoin invoice are used as a checksum so that typographical errors can be automatically found and rejected. The checksum also allows Bitcoin software to confirm that a 33-character (or shorter) invoice is in fact valid and isn't simply an invoice with a missing character.

Testnet

Invoice addresses on the Bitcoin Testnet are generated with a different prefix. See List of address prefixes and Testnet for more details.

Misconceptions

Address reuse

Invoice addresses are not intended to be used more than once, and doing so has numerous problems associated. See the dedicated article on address reuse for more details.

Address balances

Invoice addresses are not wallets nor accounts, and do not carry balances. They only receive funds, and you do not send "from" an address at any time. Various confusing services and software display bitcoins received with an invoice address, minus bitcoins sent in random unrelated transactions as an "address balance", but this number is not meaningful: it does not imply the recipient of the bitcoins sent to the address has spent them, nor that they still have or don't have the bitcoins received.

An example of bitcoin loss resulting from this misunderstanding is when people believed their invoice address contained 3 BTC. They spent 0.5 BTC and believed the address now contained 2.5 BTC when actually it contained zero. The remaining 2.5 BTC was transferred to a "change address" which was not backed up and therefore lost. This has happened on a few occasions to users of Paper wallets.

"From" addresses

Bitcoin transactions do not have any kind of origin-, source- or "from" address. See the dedicated article on "from address" for more details.


Address map

Address map.jpg


See Also

References