Topic: How to select BitCoin address for receiving money? (Read 288 times)

As others have already mentioned, "receiving" (green) addresses and "Change" (yellow) addresses function the same from an external point of view.  If you are receiving bitcoin from a sender, you'll receive it regardless of which type of address you supply to that individual.  The only difference is how the internal function of the wallet selects the addresses.

Since Electrum wants to reserve change addresses for change, it's best not to request payments to those addresses.  The use of empty addresses can help you keep track of your income and spending as well.  If, for example you receive regular payments from one individual, you may want those payments (and only those payments) going to a specific address so you can keep good records of those payments.

The way you use receiving and change addresses can have privacy implications: If you want to maintain privacy it's best that you don't mix coins from separate receiving and change addresses.  Using the "coins" tab you can select specific transactions to combine to avoid cross-linking unspent coins.

Testnet is a practical way of learning how Electrum behaves.  You may want to create a testnet wallet, and fund it from one of the many testnet faucets.  You can then create another testnet wallet and send the coins back and forth between the two.

You will see an incoming transaction as soon as the sender signs and broadcasts it on his end. If it's valid and picked up by nodes and included in their mempools, Electrum will show it to you, but in a green standard address and not a yellow change address.

I prefer selecting UTXOs from the "coins" tab instead of the "addresses" tab. You can have multiple UTXOs on the same address and using the "coins" tab is easier in such situations. But let's not confuse the OP with this right now.

If you do not want to use the 'advanced' feature, you can select another slider option in the drop-down menu of the 'send' dialogue box:
From 'ETA', 'mempool' and 'static';

• ETA: the default with most accurate estimate (but most of the time over-estimates)
• mempool: for advanced users who can understand how mempool works; usually, it's "1~0.5 MB from tip" as the 'express' fee rate.
• static: the basic slider with pre-configured values from 1~300sat/vByte.

The absolute fee is displayed above as "Mining fee", but the prioritization is based from the "fee rate" (slider).

Not quite, the addresses' highlight colors wont change since the green and yellow ones are derived from different derivation paths.

As said by others, after receiving bitcoins, it will stay in your Electrum's "green line" address where it was sent.
The "yellow line" addresses will only be used exclusively for change.

Yes, electrum allows to select which address(es) you want to spend from.
To do so, go to "Addresses" tab and right-click on any of addresses you want to spend from and select "Spend".
Note that you can use "Shift" and "Ctrl" buttons to select multiple addresses.

You can also select "Freeze" to tell electrum to not use that address for your transaction.

If you've given a green address for deposit, then it'll be in the green ones.

You don't have to enter a description if you don't want to. The description is just an optional field that remains to your wallet; it's not a message that is sent to the receiver.

Each time you have new change, they will be sent to an unused change (yellow) address. Doesn't that assist you?

Once you click “Pay” there's an “Advanced” button. Click it and you'll be able to set any target fee greater than 1 sat/byte. I recommend on using it as it demonstrates how a transaction looks like.

Thank you so far for the helpful comments.

Just to clarify the procedure:

I receive BC:

1.) I pick one of the green empty addresses from the "Addresses" tab and tell it the BC sender together with the BC amount e.g. 0.03 BC
2.) I will receive automatically the full BC amount and as soon as it is written to blockchain it appears automatically in my "Addresses" Tab as yellow line

correct?

1 want to send BC:

1.) I got from the recipient his BC address
2.) I go to "Send" tab and enter the address from 1.) over there in "Pay to" entry field together with a description and the amount and click button "Pay"
3.) The BCs are AUTOMATICALLY taken from one or more of my yellow, non-empty addresses. A part is sent to the recipient.
    The remaining change is pushed back to another of my yellow, empty addresses

Questions:

Do I have any control from which of my yellow, non-empty addresses the send BC amount is taken?

How do I specify how much I am willing to pay to the miner as transaction fee?

That's correct. The client will send the selected amount to any valid address you enter/paste into the send tab.

Electrum won't create a new one. Like o_e_l_e_o said, it will select one from your list of already existing change addresses.

You are forgetting one important element of every bitcoin transaction. The mining fees.  Each transaction requires you (the sender) to pay a transaction fee to the miner to include your transaction into a new block. So your change address will be funded with 0.03 BTC minus whatever fee you ended up paying.

As nc50lc has said, the yellow ones are change addresses.

When you receive bitcoin from an outside source, Electrum will only show green "receiving" addresses on the "receive" tab.
When you receive change back from your own transaction, Electrum will only send it to a yellow "change" address.
Note that there is no inherent difference between how the addresses work, and you could receive external bitcoin to a change address or send your own bitcoin back to a receiving address if you wanted, but Electrum would never do this automatically.

Not quite. Rather than creating a new empty change address, it will simply pick the next unused change address from the list it pregenerates, and send your chance there. As you start using these change addresses, Electrum will automatically generate more to keep a list of 10 unused ones as default.

As above. By default Electrum generates a list of 20 unused receiving addresses and 10 unused change addresses. When you use an address at the top of the list, it creates a fresh unused one at the bottom of the list.

The yellow-highlighted ones are your "Change Addresses", those are addresses reserved to receive the change of your transactions.
Those will not appear in your 'receive' tab if you're using the tab.

Thank you so far for the comments.

So I should receive BCs on empty addresses only. Ok

But why are there yellow AND green empty bitcoin addresses?

As far as I understand if I send some 0.02 BC from an address in my Electrum Wallet containing 0.05 BC then Electrum
- sends 0.02 to the given target address of the recipient
- creates automatically a new empty address
- send the remaining change of 0.03 BC to this new address
- add the new, just created address automatically to the list of yellow change addresses visible on the "Adresses" tab.

So why are there EMPTY (!) yellow addresses listed on "Addresses" Tab?

Peter

I don't think this two features are connected though. The payment requests and their expiration time existed long before Lightning Network or its addition to Electrum.

P.S. I think part of the confusion may be because of the name of the tab (ie. Receive). Maybe if it were renamed to something like "Invoices" it could reduce the confusion at least.

Yeah, the issue being that Electrum is trying to support Lightning... which is where I believe the "expiry" time has more relevance. Unfortunately, this ends up being very confusing for new users who suddenly think their "receive address" is going to expire if their transaction doesn't confirm quickly (hence all the posts from users when the network is overloaded and transaction confirmation times for low fee transactions blow out to hours/days).


Personally, I also like the idea of making it an "advanced" feature like with the "Pay" dialog and the advanced preview option... and I think it should be disabled by default (like the advanced preview).

Actually, that may wasn't a wise move. It does work simply, truth be told. I think that the main problem of this “Receive” tab is the expiration which brings confusion. If they just removed this “Expire after (?)” or set as default the “Never” option.

The users should not confuse on-chain with off-chain transactions as they do distinguish in that very part of expiration.

It is hard to say. I would remove it entirely if I were the Electrum developers. But maybe if they want to keep it, this feature should be moved to some sort of "advanced" section that has to be manually activated and be under a different tab saying something like "payment requests" with an explanation of what they do and how their expiration has nothing to do with "expiration of addresses" which is not a thing!

I concur. The whole "request payment" feature and the expiry time stuff really needs some sort of rework. The number of "HALP!!!!111!! MY PAYMENT EXPIRES IN 1 HOUR"-type threads we get from people that generally contain statements like "I just installed Electrum and have never used it before" would indicate that it is indeed quite confusing for new users who are attempting to receive their first Bitcoin payments.

The question remains tho... how should it be changed to make it less confusing whilst maintaining the same functionality?

I see where this is coming from.
It's a matter of preference though, but I'd always suggest newbies not to use the advanced features such as hidden tabs or console.

You can check if the address is already used before in Addresses tab too. There is a number of transactions in front of each address and there is also filters on top that can be applied to the list to only show addresses that have never been used, or addresses that have funds, etc.
I particularly dislike the Receive tab because it has caused a lot of confusion among newcomers with its "request payment" feature that expires.

Just use the "Receive" tab.
From there, Electrum will automatically select one of your unused receiving address each time you create an invoice (receive queue).
That way, you don't have to manually check the addresses if those are already used, because as the consensus here: it's not recommended to reuse addresses.

No, you should never reuse addresses. With a chain analysis you may get yourself traced. Better just use another one each time, it's for your privacy.

The word says itself; receiving addresses, when you want to receive bitcoins. Any change you have when you spend from your receiving addresses goes to the change addresses. You can obviously spend from those too, it's just a way distinguish your money.

You can use either emptied (address that has not received bitcoin before) green or yellow address, but it will be good to use the green which are the receiving addresses, while the yellow ones are change addresses.

But Electrum will also always change address for you for new transactions, you can as well click on new address to see another new address.

On Electrum GUI, click on receive tab, then click on new address if you want to request for another new address click on it again.