Why generate a new address?


#1

Daedalus has an address generator. If I have one address, why would I need to generate another address?


#2

Cardano have the UTxO model accounting on the main chain. UTxO model assumes that every coin deposit will happen on its own new address. Mostly for security reasons and stuff. For example - you have a wallet with some coin in it, and you need to give someone an address so they could send you new coins, but you don’t want them to know how much coins you already have. Anyone who knows you address can see how much coins in there, on the explorer website. And every address have its own balance.

Of course this is not forced, so you can manually send as many transaction to the same address as you want (like with a paper-wallet), but if you want - you can also get new separate addresses. Each of them will have its own balance, but you will have access to all of them, cuz they are part of the same wallet.

NOTE: that when you send coins from Daedalus - it automatically generates a new address to sed the change to. So if you have 1000 coins on a single address, and you want to send 100 coins to someone - Daedalus will create a new address in your wallet and (most probably) send 900 coins there.

Additional UTxO explanation: https://www.ccn.com/bitcoin-transaction-really-works/


#3

Yes, every time you generate a new address, it’s safer.


#4

Got it - thanks,