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There is some advice for merchants to have a unique Bitcoin address for each incoming address. Apparently this will help associate a transaction with a sender.

Since it can take a long time to generate a vanity address:

  • Is there any benefit to doing this if one should be created per sender?

  • When does it make sense to use a vanity address?

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Vanity address' purpose is generally in its name - vanity. You mainly use it to show off, like say in forum's signatures or general donation address, not for business in most cases. Usually you won't want to use a vanity address when you want to remain anonymous, which is what you try to accomplish by using a new address for each transaction. You can use the vanity address to mark your brand as well. For example, SatoshiDice's addresses all start with "1Dice".

Generally, you would use a vanity address if you can spare the computational power where people could see it quite clearly, and use the other addresses when you don't want to make an effort.

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Very little commerce can occur using a static address.

A similar problem is faced where bitcoin exchanges accept cash deposit at a bank. All the customers will deposit to the same bank account, so the solution was to request a unique amount for each customer. That amount is what marks the transaction and provides the ability for the exchange to know which customer account to credit for the deposit.

That type of scenario is vulnerable to human mistakes and inconveniences the customer -- paying more or less for a purchase just to overcome this "one address" limitation is not an ideal solution.

The static payment address also works suitably well where transaction volume is very low. If there is only a few payments in-progress at any point in time, a merchant can manually figure out which customers have paid and which haven't. But that doesn't scale and will also be impacted by human error.

About the only use case that makes perfect sense is for donations where the contributor does not need to be recognized. But even then, a static address may not be ideal. Consider the WikiLeaks donation address. Now that Assange is an enemy of the state, having transactions to WikiLeak's address be relatively easily discovered might not be good.

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