Beginner Question "The provided Bitcoin address is not valid"

[SKawakami]

Hi All,

I'm a total beginner to all this, but after hours of googling could find no straight answers so thought I'd ask on this forum.

Apologies if this has been asked many times before.

I have an Electrum wallet, and selected the Segwit option instead of Legacy, as I was advised to do this and it seemed like the default.

Having meticulously followed all instructions I went to an exchange called coinify.com to purchase a small amount of BTC to send to this wallet.

Coinify keeps telling me that the receive address I am copy-pasting over from my wallet is an "invalid address".

My searches are indicating this could be because Electrum is generating a certain kind of "Segwit" addresses, which exchanges do not like sending to. Is this the case?

Have I gone down a blind alley using a format that is going to be incompatible with everything else? Would I be better off starting from scratch with a different wallet?

Any advice from anyone with experience of Electrum or Coinify, would be much appreciated.

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[jackg]

Most likely you have made an electrum wallet that uses bech32 addresses (or as newbies know them, the thing starting with bc1 ).

I think the best method of getting around this is by going to make a new wallet, select standard wallet, create a new seed and click legacy. Then follow the previous instructions and you can send the coins there.

There is nothing to say that if you're holding the coins you can move them eto the segwit wallet while the fees are low and then the exchange should still accept them (hopefully). I'm nearly only using bech32 when I can it's a vast reduction in fees for sending transactions but you can leave the coins in the legacy wallet as you wish.

[TryNinja]

You can benefit from using Segwit while maintaining full compatibility by creating a nested Segwit wallet (addresses starting with a 3).

Those are bech32 (native Segwit) addresses. They are not supported by the block explorer you are trying to use (Blockchain.info);

Either use a different explorer that supports it (e.g blockchair.com) or create a wallet with nested Segwit addresses (starting with a 3 and are supported everywhere).
Here is a tutorial for that: https://bitcointalk.org/index.php?topic=3456040.msg36735893#msg36735893

[HCP]

My searches are indicating this could be because Electrum is generating a certain kind of "Segwit" addresses, which exchanges do not like sending to. Is this the case?

In a word, Yes.

Have I gone down a blind alley using a format that is going to be incompatible with everything else?

Not necessarily incompatible with everything... it is just that some services have not yet included "bech32" compatibility.

Would I be better off starting from scratch with a different wallet?

For a beginning user, the 'safer' option is either a Legacy wallet (creates addresses that start with a "1")... or perhaps a SegWit wallet that uses the P2SH-P2WPKH system that generates backwards compatible addresses that start with a "3".

Unfortunately, Electrum does not offer creating a P2SH-P2WPKH type wallet without a bit of manual work (you need to restore a wallet using a seed mnemonic, check options, select BIP39 and then select the "p2sh-segwit" option)... As per the linked guide, doing this using an Electrum generated seed mnemonic is arguably a "bad idea"™ as they are not BIP39 compatible, so you're using the mnemonic in a non-standard way which may cause issues later.

One way to mitigate that, is to simply generate a BIP39 seed mnemonic using a different (BIP39 compatible wallet), and then import that BIP39 seed into Electrum.

The 3 different address types have a few pros and cons, but in simple terms:

"1-type" address - Legacy bitcoin address, supported by everything... creates larger transactions that can cost more in transaction fees if the fees spike
"3-type" SegWit address - P2SH-P2WPKH, backwards compatible, supported by everything... creates "smaller" transactions as it benefits from SegWit
"bc1-type" SegWit address - "native" SegWit, NOT support by all wallets/services, but offers the full benefit of SegWit and generally lowest transaction "size"


NOTE: there are non-SegWit "3-type" addresses... just to really confuse things!

[BitMaxz]

Another alternative is to buy bitcoin in other exchanges you can buy bitcoins from Coinbase but expect for KYC verification.
After you buy bitcoins from Coinbase you can send them to your Segwit wallet(Electrum) through Coinbase wallet.

The good thing on Coinify you can buy bitcoin with Debit/Credit card fast and doesn't need a KYC verification(according to some reviews) but the problem they don't accept or support Segwit address(bc1) So your best alternative is to create legacy wallet which is already mentioned above with jackg.