Why Do Wallets Generate New Addresses for Receiving Crypto?

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The wonderful world of crypto wallets can be rather confusing, especially for those that aren’t technically minded. One question we see popping up rather frequently is “Why does my wallet keep generating new addresses?” If you’ve been in crypto a while – or read the instruction manual – the answer is rather simple, but not everyone has the time.

So, let’s dive into why a lot of crypto wallets do this and why it’s a good feature to have.

Why Does it Happen?

Whether you’re using a Ledger Nano device, a Trezor wallet or even one of the many mobile wallets around, most of these wallets will generate a brand-new receiving address every time you hit “receive”. It can get rather confusing, and if you forget to generate a new address it doesn’t matter – all addresses link up to your wallet in the end. The simple reason behind it is that when you’re requesting crypto from another person or company, that person or company has no idea what the actual balance of your wallet is. This adds an extra layer of security to your crypto holdings as it doesn’t paint you as a target.

Let’s imagine you have 50 in your wallet and everyone with your public address can see it. This paints a huge sign above your address that says “target”, so if you’re going to keep asking for payments from people, it’s best to use a wallet that generates new addresses each time – it’s just safer that way.

Keeping You Safe and Secure

While this feature doesn’t exactly add any more layers of security, it does offer some level of privacy – privacy that in turn leads to your crypto being more secure. Rather than broadcasting to the world that you have a huge stack of Satoshis in your wallet, you can send a public address that is clean and empty. Not only does this obfuscate the true amount of crypto in your wallet, it gives potential hackers the feeling that you know how to secure your crypto – instantly making you less of a potential target.

Don’t Panic

So, next time you’re trying to receive crypto, don’t be afraid about sending out a new public key. Your old keys will still work perfectly fine and any crypto sent to those will still land in your wallet. Use this nifty feature to your advantage and keep your crypto more secure than ever before.