An address for cryptocurrency payments is a unique identifier that serves as a virtual location where the cryptocurrency can be sent. People can send digital coins to these addresses similarly to the way that printed money (FIAT) can often be sent to email addresses in digital form with services like Paypal, Skrill or e-banks.
Can I use the same address for different cryptocurrencies?
This is one of the biggest mistakes that someone can do in the world of cryptocurrencies!
Every cryptocurrency has its own unique type of addresses. The user should be very careful to use the proper address for each type of digital coin.
For example a Bitcoin address should be used only for Bitcoin payments, a Litecoin address for Litecoin payments, a BitcoinZ address for BitcoinZ payments and so on.
The user must pay special attention for the cryptocurrencies that have an identical format of addresses. Because the addresses in such cases may look the same (with the same letters and numbers in the beginning). For a better understanding for this, Bitcoin and Litecoin have a same address format so these can be more easily confuse the user.
Samely, ZCash and BitcoinZ have again the same format (starting with t1….).
In any case the user has to be completely sure that he is using the proper address for each payment.
Cryptocurrency addresses and QR codes
QR codes are graphical patterns with a combination of black and white squares. They are generated for many different uses like accepting payments, leading to url addresses etc. There are special QR reader applications which “read” these patterns with the camera of the user’s device. So the user has to just scan these QR codes with the right application of his device.
Cryptocurrency applications are no exception to that. All the wallet applications that host cryptocurrencies are associating each address with a QR code. This way the user can alternatively use the QR code in order to “find” the right address for the wanted transaction.
An example : George wants to send 10 coins to his friend John. John is showing the QR code of his wallet address. George uses his own wallet application scanning John’s QR code and the app asks him to enter the desired sum. He does this, he is verifying the transaction and that’s it!
Special uses of the QR codes
Some Projects like BitcoinZ offer ready to work solutions like the BTCZ PoS (Point of Sale). This is ideal for businesses in physical shops. With this app , the receiver can even define a fixed sum for a product that he wishes to sell and make a QR for this.
The buyer by scanning the QR code is informed about the transaction and the specified cost. So he decides to verify the transaction or not.
QR codes potential risks :
The sellers / retailers should always be very careful when they create a QR code in order to receive payments. They have to be sure they use a trustworthy application because there are scammers who create websites for generating QR codes but in reality they associate their own addresses in them.This way, the seller thinks that they are creating a QR code for themselves but it really deposits money into the wallets of thieves.
A smart tip : Always test every QR code with a very small sum if you are not sure about the application that has created for you!
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