Does my hardware wallet create a new address each time it receives Bitcoin?

[standardnepo]

If yes, how does the wallet decide this?

I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time? Can I keep using the same receiving address?

My second question: is it possible for two different wallets to create the same receiving address by luck?

Ps: i have Trezor Safe 3

[OmegaStarScream]

You can keep using the same receiving address, yes.

The wallet should create a new address whenever you use (receive) money on the first address. Trezor suite should also allow you to create a new address even if you don't receive funds in the first one and no, the wallet is not gonna generate the same address twice (I'm guessing you're referring to "two accounts" when you say two wallets in the second question?) and if you meant the coldcard exploit, no is also the answer.

[Chibit01]

The new wallet generation is not just for hardware wallets alone, even most hot wallets also have those features. I'm not referring to the likes of Trust wallet, but open source wallets like Electrum and its competitors.

My second question: is it possible for two different wallets to create the same receiving address by luck?

That's not possible as I have not encountered or even hear of such before

Edit: according to Satoshi

If you were to intentionally try to make a collision, it would currently take 2^126 times longer to generate a colliding bitcoin address than to generate a block.  You could have got a lot more money by generating blocks.

So it's mathematical possible but the chances of that happening in this world is very rare.

[un_rank]

With hardware wallets and software ones too, if you're clicking on receive to get the wallet address that you will be sent to, it will generate a new one each time for privacy. For most you will get a need one even without receiving any bitcoins to the previously generated address because you could have already sent it out and are waiting to receive a deposit on them, making it best to have a new one each time.

All of your receiving addresses are valid.

- Jay -

[odolvlobo]

If yes, how does the wallet decide this? I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time? Can I keep using the same receiving address?
My second question: is it possible for two different wallets to create the same receiving address by luck?

Wallet software generally creates a new receive address every time the current one has been used. The hardware itself does not track address use. Whenever you open the wallet software, it scans the block chain looking for its addresses in any transactions. If it sees that the current receiving address is used, it will create another. It creates new addresses from the master public key that the hardware shares with it.

Bitcoins can be sent to the same address multiple times. However as you already know, sharing a single address with multiple people lowers your privacy.

It is possible for two different wallets to create the same receiving address by luck, but it is so unlikely that it can safely be considered to be impossible.

[Charles-Tim]

The new wallet generation is not just for hardware wallets alone, even most hot wallets also have those features. I'm not referring to the likes of Trust wallet, but open source wallets like Electrum and its competitors.

With hardware wallets and software ones too, if you're clicking on receive to get the wallet address that you will be sent to, it will generate a new one each time for privacy. For most you will get a need one even without receiving any bitcoins to the previously generated address because you could have already sent it out and are waiting to receive a deposit on them, making it best to have a new one each time.

It is better he mention the name of the wallet than to generally post that both cold and hot wallets can do it. Example is the not reputable Trust wallet that give bitcoin users one address. If you receive bitcoin with it, no new address is generated. Even if it is a hardware wallet, it is better the name of the wallet is mentioned just as he mentioned Trezor Safe 3 for him not to think all noncustodial wallets are like that. Any wallet that does not value privacy supposed not to be used.

[standardnepo]

I'm guessing you're referring to "two accounts" when you say two wallets in the second question?

I meant, could two different wallets create the same address by luck? I’m asking this because wallets can have lots of addresses  right? So I’m wondering about the possibility of having the same address from two different wallets.

Thanks for your answer!

Edit: according to Satoshi

If you were to intentionally try to make a collision, it would currently take 2^126 times longer to generate a colliding bitcoin address than to generate a block.  You could have got a lot more money by generating blocks.

So it's mathematical possible but the chances of that happening in this world is very rare.

Oh, I see. It’s a huge number. I got it, thank you.

[Cookdata]

My second question: is it possible for two different wallets to create the same receiving address by luck?

That's not possible as I have not encountered or even hear of such before

Edit: according to Satoshi

If you were to intentionally try to make a collision, it would currently take 2^126 times longer to generate a colliding bitcoin address than to generate a block.  You could have got a lot more money by generating blocks.

So it's mathematical possible but the chances of that happening in this world is very rare.

It's not possible if you use random entropy that is at least 128 bits combination. However, it is only possible if you use lower entropy or if the entropy are not random enough.

Remember the recent attack on Coldcard wallet, the hackers were able to regenerated private keys and addresses from wallets created from Coldcard as a result of weak entropy.

[Livingleged]

A bitcoin wallet like the trezor safe 3 can create new receiving address each time because one seed phrase can generate many different addresses. The wallet keeps track of the addresses you have used and normally give you a fresh one when you want to receive bitcoin. You can still use the same address again though, and the bitcoin will arrive normally, but reusing it just make it easier for someone to connect your different payment and see your entire transaction history.

As for your second question, two different wallet to accidentally create exactly the same address, the chance is kind of small in practice, bitcoin uses a very large number in it cryptography, so randomly generating same address would be almost impossible. However if two wallet are restored from the same seed phrase, they will definitely generate the same address, in this case it is expected not accidental.

[Mia Chloe]

If yes, how does the wallet decide this?
I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time? Can I keep using the same receiving address?

Well it comes from your seed and derivation. It's not just for hardware wallets but for software wallets too so long it is a HD wallet you're gonna have a number of receiving addresses and change addresses that are used to consolidate funds anytime you make a transaction. HD allows the wallet to hash multiple addresses from one public key.

My second question: is it possible for two different wallets to create the same receiving address by luck?

Nope the chances are just to slim for you to even consider it a possibility. To answer your last question you can use one address continuously as many times as you like. But when you make a transaction your wallet will still try to consolidate the change and end up splitting it.

[hosemary]

So it's mathematical possible but the chances of that happening in this world is very rare.

When you say "very rare", it sounds more like something that has a low probability of happening, but still happens occasionally.
The probability of two different people generating the same Bitcoin address is negligible and practically zero.

[AVE5]

I'm guessing you're referring to "two accounts" when you say two wallets in the second question?

I meant, could two different wallets create the same address by luck? I’m asking this because wallets can have lots of addresses  right? So I’m wondering about the possibility of having the same address from two different wallets.

You're still dangling at the same point but however, the simple truth is that on no account would two different crypto wallets make such coincidence of generating exactly same kind of wallet addresses. Instead, a wallet is programmed to produce unique address.
I stand to be corrected, for such coincidence to happen, then it must be from different crypto network to separate the difference so that there'll be no interference were the other wallets private keys doesn't control the other user's wallet address as they might be the same.
In fact, it's impossible for different wallets to generate same address. I've over think myself out of this.

[hosemary]

Instead, a wallet is programmed to produce unique address.

This is not true.
In practice, it's impossible that your wallet generates an address that has already been generated by someone else, but that's not because your wallet prevents it. It's because the number of possible addresses is so large that the probability of such a coincidence is negligible.

Note that your wallet doesn't even know which addresses have already been generated by other people before.

[Cricktor]

Instead, a wallet is programmed to produce unique address.

HD wallets, commonly used by software and hardware wallets, use deterministic BIP32 key derivation. A fixed and standardized derivation path has normally then 2³¹ possible child keys and public addresses, normally unhardened keys, but there're also 2³¹ hardened keys possible (you can have that many keys on every branch level of the derivation path, but standard wallet behavior is not to go crazy here, because it's not needed).

Because the Child key derivation (CKD) funktions use the hash function HMAC-SHA512, it's simply so extremely unlikely that hash collisions will ever occur (I'd boldly say, not in the lifetime of the universe), that it's OK to say, we will never observe two different wallets to generate ever two same keys or addresses. Mathematically possible, because a collision can happen, probability is basically so close to zero that it practically matches zero (cough, cough, don't tell this a mathematician). For us mortals the probability of a collision with HMAC-SHA512 is basically zero as zero can be.

[Leon Zimmer]

Normally, a wallet that is provided with the wallet seed can create new receiving addresses based on the rules of the wallet seed. That way you will not need another wallet each and every time. It is possible to create many addresses out from the same seed, and this is exactly what Trezor does in order to offer a greater number of addresses that serve the goal.

​The same receiving address may be used, but preferably a different one with every payment. If the same address has many transactions, it becomes easier to find the transactions that are related to it by just one user.

​Technically it could happen that two wallets produce the same address by chance, but this is almost impossible. With the number of possible Bitcoin addresses extremely high, the chances of randomly getting the same address are very low.

[BlackBoss_]

If yes, how does the wallet decide this?

I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time?

It's change address and for privacy, it's recommended to use change addresses, and avoid reuse addresses.
It's a default setting for HD wallets.
https://learnmeabitcoin.com/technical/keys/hd-wallets/
https://github.com/bitcoinbook/bitcoinbook/blob/develop/ch05_wallets.adoc#hierarchical-deterministic-hd-key-generation-bip32

How do HD wallets work?
https://learnmeabitcoin.com/technical/keys/hd-wallets/#how

Can I keep using the same receiving address?

Yes, you always can use one address many times.

My second question: is it possible for two different wallets to create the same receiving address by luck?

Depends.

If the HD wallet you use, actually generate wallet seed with enough bits of entropy. Lately Coldcard hardware wallets with some models got hacked because lack of enough bits of entropy.
Large-scale Coldcard compromise (1596 BTC stolen so far).

https://learnmeabitcoin.com/technical/keys/hd-wallets/#are-keys-secure

Are the keys in an HD wallet secure?

Yes, all of the private keys and public keys you get from an HD wallet are as secure as if you generated them independently using a random number generator.

[Peanutswar]

I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time? Can I keep using the same receiving address?

Ps: i have Trezor Safe 3

Since you are also using a Trezor wallet, yes you can keep the address you have been use before, once there is balance with that address it will be listed into your recent used address and you can edit the label the wallet and you can now use again that at the same time.

My second question: is it possible for two different wallets to create the same receiving address by luck?

With the different wallet it does not create a same combination of address. With the possible tons of number of combinations seems there is quite far from that.

[#CapsLOck]

There is one minor difference: the wallet does not go to the effort of verifying if an address was used anywhere in the world before creating a new one. For an HD wallet, new addresses are generated based on the seed and different derivation paths and indexes. The wallet software will store the addresses generated and will display another one if necessary. That's why if you restore the same seed in another compatible wallet, the same addresses will be reproduced. Theoretically, two different seeds can be used to produce the same address, but this is so rare that it is effectively impossible for it to happen.

[Antidote47k]

The address gap limit is another detail that can surprise people using HD wallets.
Generally, wallets can’t particularly derive address infinitely when restoring a wallet on a new device or software, what I mean is while they can derive as many addresses as needed, they also need to decide how far down the derivation path to search for used addresses when restoring and the standard convention(BIP44) is usually a gap limit of 20 unused addresses.

So, take for instance a user generates a large number of addresses without particularly using them and then later restores the wallet, following the discovery rule, the software may stop scanning before it reaches an address beyond that gap. If bitcoin was sent to an address beyond the gap, the transaction won’t show up in the balance, although it’s not as if the coins are lost, they are still safely controlled by the wallet, you just need to tell the wallet to expand its search depth.

[Outhue]

If yes, how does the wallet decide this?

I understand that for privacy reasons, it’s better to send Bitcoin to a new address each time. But how does the wallet decide to create a new address each time? Can I keep using the same receiving address?

My second question: is it possible for two different wallets to create the same receiving address by luck?

Ps: i have Trezor Safe 3

Nothing to worry about, all addresses still runs on the same private key or recovery seed that you got, once you receive a transaction on a Bitcoin address another new one will be generated, it helps with privacy but not all crypto wallets works this way, it was new to me too when I was a newbie, a jump scare happened because I thought something bad has happened, it's good that you ask but you are in safe hands, just Bitcoin only, your ETH address or other alternative coins addresses won't change.