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Guide · Oct 6, 2026 · 7 min read

What a bitcoin wallet address is, and how your miner's payouts reach it

Before a miner can pay you it needs one thing from you: an address. Here is what that string of characters is, where it comes from, the five steps that put it in a pool, and why the first payment can be a week or a month away.

Firsthand card: "What a bitcoin wallet address is, and how your miner's payouts reach it", with 0.005 BTC, f2pool's default payout minimum, as the figure

An address is an account number that can only receive

Before a machine can pay you, it needs somewhere to send the coins. That somewhere is a bitcoin address: a string of letters and numbers that works like an account number that can only receive. You can hand it to a pool, a host or a stranger, and the worst they can do with it is send you bitcoin.

The Bitcoin wiki defines it as "an identifier of 26-35 alphanumeric characters, beginning with the number 1, 3 or bc1 that represents a possible destination for a bitcoin payment." Nothing in it lets anyone move coins out, because spending is done with a separate secret that never appears in the address.

A few characters at the end of every address are a checksum. As the wiki puts it, they are used "so that typographical errors can be automatically found and rejected". A wallet will refuse most addresses with a mistyped character, which is a useful safety net, and the reason you copy and paste instead of typing.

Give the address to anyone. It lets them pay you. It lets them take nothing.

The address comes from a wallet, and the wallet holds the keys

A wallet is the app or device that creates addresses and holds the secrets that spend from them. Open its receive screen and it shows you an address. Today's addresses mostly start with bc1; the older kinds start with 1 or 3, and all three work.

The secret is what counts. Most wallets give you a recovery phrase, a list of words, when you set them up. Whoever has the phrase can move the coins, and anyone who loses it with no other copy loses the coins. Bitcoin.org is blunt: "If you permanently lose access to your wallet, for example by losing your recovery phrase, your funds are gone permanently." It adds that no one, "not developers, miners, wallet providers, or exchanges", can recover them.

So choose a wallet you can explain to yourself. Where is the phrase written down, who else knows about it, and what happens if you lose the phone? Answer those before the first payment lands, not after.

Your own wallet or an exchange account

There are two ordinary places to point a payout. The first is a wallet where you keep the recovery phrase yourself. The coins sit at your address and nobody can freeze or move them for you. The second is a deposit address from an exchange. The exchange shows you an address, credits your account when coins arrive and keeps the keys, so the coins are on its books until you withdraw them.

An exchange is convenient if you plan to sell. If you plan to keep the coins, which is the way we think about mining, a wallet you control is the straightforward answer: the pool pays it directly and no company stands between you and your bitcoin. That is also how hosting works with us. As our hosting guide sets out, the pool pays your wallet and the host never holds your coins.

Whichever you pick, give the pool one address that belongs to you and that you have checked. The next section shows how.

Five steps from empty wallet to the pool's payout box

Step 1: create the wallet. Install a reputable wallet app, or set up a dedicated device, from its maker's own website. Choose the option to create a new wallet.

Step 2: write down the recovery phrase. Put it on paper, in a place only you can reach, and keep a second copy somewhere else. Never type it into a website, a chat or a form, and never send it to anyone. A pool, a host or a shop has no reason to ask for it.

Step 3: copy a receive address. Open the wallet's receive screen and copy the address it shows. Look at the first characters: for a modern wallet that is bc1.

Step 4: paste it into the pool's payout settings. Both pools we looked at keep this on a settings page: Luxor calls it the subaccount's payment settings, and f2pool puts the wallet address in Payout Settings. Pick the threshold and, where offered, the schedule.

Step 5: check the address twice. Compare the first six and last six characters against the wallet. Then expect a short wait: Luxor's documentation says funds are "temporarily frozen for 24 hours as a security measure" after you change payment settings. It is a security measure and not a fault.

When the first payment arrives depends on the threshold

A pool credits your account all day, then sends the balance to your address once it passes a minimum. Every payout is its own bitcoin transaction and carries a cost, which is why pools wait until the amount is worth sending.

The two pools above set it differently. f2pool lets you choose "0.005 (default) / 0.01 / 0.05 / 1 / 5 BTC" and says that once you reach it "you will receive a payout for your mining rewards within 24 hours". Luxor's minimum for bitcoin is 0.001 BTC, with a withdrawal fee of 0.000075 BTC per payment, and you choose daily, weekly or monthly payments, processed shortly after 04:00 UTC. Rules change, so read the page before you start.

In dollars, at the 6 October 2026 price of $85,771, that is about $429 for f2pool's default and about $86 for Luxor's minimum, with a fee of about $6.43 on each Luxor payment. A threshold is a number of bitcoin, so what it is worth moves with the price.

A pool does not pay every five minutes. It waits until your balance passes a minimum.

Chart: The bitcoin price over the last year. A payout threshold is fixed in bitcoin, so the dollars it represents rise and fall with this line. Open the chart

A 270 TH/s machine reaches the threshold in days or weeks

How long that takes depends on what the machine earns. On 5 October one petahash earned 0.000476 bitcoin on our hashprice chart. A 270 TH/s machine, like the air-cooled Antminer S21 XP, is 0.27 petahash, so it earns about 0.000129 bitcoin a day, before the pool's fee.

At that rate it takes about eight days to reach Luxor's 0.001 BTC, and about 39 days to reach f2pool's default of 0.005 BTC. Neither wait means anything is wrong. It means the first payment is a month away on one setting and a week away on another, and that you can plan around the date.

If you want the first payment sooner, a lower threshold is the lever, where the pool offers one. Read what each payout costs first, because a fixed fee on each payment takes a bigger bite out of small ones.

Chart: What one petahash of mining earns per day. Divide a threshold by your machine's share of a petahash times this figure and you have the wait for the first payment. Open the chart

What you will see when a payout lands

On the pool's page the balance drops to near zero and a payment appears in its history, usually with a transaction ID. In your wallet the same amount shows up as an incoming payment, first as pending and then as settled once the network has confirmed it. Pending for a short while is normal.

The amount in your wallet is a little less than the pool's earnings suggest if the pool takes a fee or charges a withdrawal fee, which is why it pays to read the two pools' fee lines before you choose. If the pool shows a payment and the wallet shows nothing after a few hours, paste the transaction ID into a public block explorer and look it up before you contact anyone: it shows which address received the payment.

Three mistakes that cost money, and how to avoid them

A valid address that is not yours. The checksum catches typos. It cannot catch an address that is perfectly valid and belongs to someone else, such as one copied from an old email or the wrong wallet. Copy it fresh from your own wallet's receive screen and compare the ends.

Losing the recovery phrase. There is no help desk for a self-held wallet. Two paper copies in two places beats a photo on a phone.

Letting one address collect everything for years. Bitcoin.org's privacy advice is to "use a new Bitcoin address each time you receive a new payment", because "anyone can see the balance and all transactions of any address". A pool pays the one address you gave it, so that address will show every payout and the running balance. That is fine for a mining payout box. It is a reason to move the coins on to a wallet you use for keeping them once they build up, and not to post the address in public.

What it means for a miner

Setting up a wallet takes about an hour and it is the only part of mining that cannot be fixed later: lose the phrase and the coins are gone, however well the machine ran. Do it first, check the address twice and watch for the first payment to land before you rely on it.

The reason to care is what the coins cost. On today's numbers the most efficient machine in stock, at the cheapest site that can run it, makes a bitcoin for about $18k of electricity, against about $86k to buy one. That is electricity only, at today's hashprice, before the machine and the pool fee. A miner who keeps the coins in a wallet they control keeps the difference. Mining output depends on bitcoin's price, network difficulty and uptime, and is not guaranteed. Nothing here is investment advice.

Sources and further reading

Disclosure

Firsthand Bitcoin sells and hosts mining hardware, including this machine. No manufacturer, distributor or affiliate programme paid for or reviewed this page and we take no commission on the links above. Historical figures are computed from daily bitcoin price and network hashprice, each day valued at its own prices. Nothing here is investment advice.