Verification of a bitcoin address: how does it work and where can you find your address?

In the Netherlands, the regulator requires Bitcoin companies to verify their customers’ Bitcoin addresses. In many cases, service providers therefore ask you for a screenshot of your wallet, on which the relevant bitcoin address is visible. In this short guide we explain how you can look up your bitcoin address(es) so that you can provide such a screenshot.

The target

The Dutch regulator recently required Dutch Bitcoin companies to check whether the Bitcoin addresses that customers provide actually belong to them. The measure is intended to combat money laundering and terrorist financing.

When you buy bitcoin somewhere, you will therefore have to verify the bitcoin address on which you want to receive it. According to the regulator, this can be done by sending a screenshot of your wallet, with the relevant bitcoin address visible.

Every bitcoin address that you want to use with Dutch service providers to receive bitcoin must be verified separately. If you specify a different bitcoin address with a new order than with a previous order, you will therefore also have to verify the new bitcoin address.

Your bitcoin address

Bitcoins are managed and stored in a bitcoin wallet. Such a bitcoin wallet is virtual and only exists on the blockchain, but can be managed using wallet software and your seed phrase . You can read more about that in our quick guide for beginners.

A bitcoin transaction always takes place between two bitcoin addresses; they move from a sender’s address to a recipient’s address. If you want to receive an amount of bitcoin, for example because you buy it somewhere, you will therefore have to provide one of your bitcoin addresses.

Examples of different types of bitcoin addresses (don’t use these yourself!):

  • Old (P2PKH): 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa
  • Newer (P2SH): 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy
  • Latest (Bech32): bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq

In principle, a bitcoin wallet can generate as many bitcoin addresses as you want, all of which are unique and belong to your wallet. Everything you receive on those bitcoin addresses ends up in your wallet. In that sense, it does not matter which address you use to receive bitcoins. However, because all transactions on the blockchain are completely public, it is common for privacy reasons to use a fresh and unused bitcoin address for each transaction. Most wallet software does this automatically.

Unfortunately, the regulator’s requirement is not in line with this. After all, if you provide a new bitcoin address for every transaction, you will end up in the verification mill again and again. Many people therefore find it more convenient to verify one bitcoin address and reuse that address for all future orders. Then you only have to go through the verification process once. After an order has been delivered to the verified bitcoin address, you are basically free to do whatever you want with it.

What is expected?

A photo is also allowed

If you find it complicated to take a screenshot, sometimes a photo is also good. Make sure that the photo is clear and that all details are clearly visible!

For the verification of a bitcoin address it is important that a screenshot you provide contains the following:

  • It is a screenshot of the wallet software you are using
  • Compliance staff should be able to recognize which wallet software you are using based on your screenshot. If you update your screenshot for privacy reasons (that is allowed), please note that you do not edit the screenshot in such a way that it is no longer clear which software is involved
  • The bitcoin address you specified with the order must be visible on your screenshot

There are several types of screenshots that are acceptable.

Via the ‘Receive’ button

When you press the ‘Receive’ (sometimes ‘Receive’ or ‘Request’) button, most wallet software displays a fresh and unused bitcoin address, which you can provide to a service provider. The moment you generate a bitcoin address in this way to use with an order, you can of course immediately take a screenshot of it. That way you are always on the right track. However, many people only find out later that they have to verify their bitcoin address. That is usually not a problem. As long as no funds have been received at the bitcoin address, most wallet software assumes that the address is still unused.

If you press the ‘Receive’ button again, there is a good chance that the software will show the same bitcoin address as last time. You can still take a screenshot of it. This works in most cases but not always, because every wallet software is different. For example, the Blockstream Green wallet never shows the same bitcoin address again.

Above: Sample screenshot of a Blockchain.com wallet. The red arrow indicates where the bitcoin address is, which must be visible.

If for some reason it doesn’t work – don’t worry! You can always try again with a new bitcoin address. The procedure differs per service provider, but at Bitonic you can enter your details via the website and start a new verification procedure for a different bitcoin address.

Through the address list

Wallet software aimed at more advanced users sometimes has additional functionality, with which a list of associated bitcoin addresses can be viewed. This is the case, for example, with the widely used Electrum wallet for Desktop.

Above: Example of a list of bitcoin addresses in Electrum Desktop. All bitcoin addresses in the list belong to the same bitcoin wallet.

If you take a screenshot of such a list of addresses, with the relevant bitcoin address visible on it, that is also good. If you want to make the other bitcoin addresses invisible for the sake of your privacy, you can do so. Keep in mind that it must be clearly recognizable for compliance employees which wallet software you use.

Hints

  • Once you’ve verified a bitcoin address, save it for next time. Then you don’t have to look it up every time.
  • If you have forgotten which bitcoin addresses you have verified, you can request this from the service provider. At Bitonic you can enter your details via the website to request your verified addresses.
  • For privacy reasons, some people choose to move bitcoins that have been delivered to a verified bitcoin address to another bitcoin address after receipt.

You can also automatically verify a bitcoin address via message signing. That is a much faster method for advanced users, but less suitable for beginners.

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