How a wallet address works
A wallet address is a string of letters and numbers that identifies a destination on a blockchain, like an account number for receiving crypto. It is derived from your wallet’s public key and is safe to share, because it only lets people send funds to you, not take them. Sending requires the matching private key, which never leaves your control. Each blockchain has its own address format.
Worked example
Someone wants to pay you in crypto. You give them your wallet address, they send the funds, and the transfer is recorded on the blockchain for anyone to verify. But addresses are unforgiving: send to a wrong or mistyped address, or to an address on the wrong network, and the funds are usually lost permanently, because there is no central party to reverse the transaction. Always verify before sending.
Addresses and custody
Managing addresses and matching networks is part of the responsibility of self-custody. A single wrong character can send funds into the void. On Volity, trading crypto as spot or CFDs means you are not manually sending to addresses for every action, removing one of the most common ways people permanently lose crypto. Addresses matter most when you self-custody and transfer on-chain.
Why it matters
A wallet address is safe to receive on but unforgiving to send to, so a typo or wrong network can destroy funds with no recourse. Always double-check the address and the chain. Related: seed phrase and self-custody vs custodial.
Learn more in our crypto trading guide.
