New swap, new Bitcoin address: the free privacy habit
Reusing one Bitcoin address tells the world more than you think. Here is what leaks, and how your wallet already makes fresh addresses easy.
Bitcoin transactions stay public forever. Stick to a single address for everything, and anyone who learns it just once can view your whole balance plus every payment that ever came in or went out. Think of it as handing out your account number and accidentally posting your bank statement on a billboard with it.
What a reused address reveals
- The full balance held at that address.
- Each amount ever received, along with the timing.
- Connections between payments that would otherwise seem unrelated.
Good news: your wallet handles it
Today's wallets are hierarchical deterministic, or HD, wallets. The name is long, the idea is short. One seed phrase can generate an unlimited series of addresses, and the wallet hands you a new one whenever you tap Receive. Every one of them is yours, and every one comes back when you restore that single backup.
That makes the habit simple: tap Receive, use the new address, and you are done.
Apply it to refunds as well
A Bitcoin swap on Swap1337 asks you for a refund address, used if the swap cannot finish. Make that a fresh address too, rather than the one you just sent from. That way a refund does not stitch your history together.
About change outputs
Whenever you spend, whatever is left over normally returns to a brand new change address that your wallet creates. That is expected, and it helps your privacy. Some wallets also offer coin control, which lets you pick exactly which coins to spend. When your coins come from different sources, keeping them separate stops them from being linked in a single transaction. Want to put this into practice? Start a BTC to XMR swap.
Quick answers
Is having lots of addresses a risk?
Not at all. A modern wallet derives every one of them from a single seed phrase, so one backup of that seed protects them all.
What kind of Bitcoin address should I pick?
Native SegWit addresses, the ones beginning with bc1q, have the widest support and are cheap to spend. Taproot addresses beginning with bc1p are newer and work fine wherever they are supported.
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