Person A wants to send some bitcoins to Person B. How will Person A come to know about the Person B's address? And for every transaction Person B's address (as well as Person A's) changes. How will Person A keep track of these changes?
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3 Answers
Usually, when people want to pay each other, they are already communicating as they have been arranging some form of transaction. Just like with other settlement methods, the receiver communicates to the sender how they would like to receive payment.
The receiver may do so e.g. by sending an invoice, displaying payment instructions on the checkout page of their merchant website, copying their address into chat, or displaying a QR-code to be scanned with a handheld device.
Person A wants to send some Bitcoins to person B. How will person A come to know about the person B's address?
Person B shows Person A a QR-code displayed on B's smartphone wallet. Person A uses their phone's wallet to capture an image of the QR-code and extract the address.
or
Person B spells out the address over the phone, and A enters into A's wallet as the receiving address.
or
Person B sends the address in a Facebook message
or
any of a thousand other ways people communicate information with one another.
And for every transaction Person B's address (as well as Person A's) changes. How will Person A keep track of these changes?
Person A and B do one of the above each time A needs to send B money.
answered Oct 26, 2021 at 11:17
And for every transaction Person B's address (as well as Person A's) changes. How will Person A keep track of these changes?
In addition to what Murch and RedGrittyBrick wrote, it is also possible for Person B to give Person A an 'extended public key', which is a piece of information that will allow Person A to derive new addresses that belong to Person B. By using the extended public key, Person A can make many payments to Person B, without having to contact Person B for new addresses each time (and without reusing an old address).
Note though, that giving someone an extended public key gives them a full view of your wallet history at that account level (a serious privacy concern), so it is only something that should be done in certain cases, for trusted individuals. Additionally, if any of the (non-hardened) child private keys are compromised, someone that has the extended public key will be able to derive the extended private key (thus compromising all other child private keys)
