Understanding xPub Keys: How Coinsnap Enables Direct Bitcoin Self-Custody for Merchants
What Is an xPub Key – and Why Is It Important for Coinsnap?
A simple introduction for Bitcoin beginners and Coinsnap merchants.
Bitcoin is an open, transparent, and self-sovereign monetary network. Merchants who accept Bitcoin often prefer receiving funds directly into their own wallet — without intermediaries, custodians, or centralized services.
To make this possible, Coinsnap relies on an important Bitcoin concept: the xPub key.
This article explains what an xPub key is, why Coinsnap uses it, and how merchants can set it up in a few minutes.
What Is an xpub Key (Explained Simply)?
- From a single xpub key, your wallet (or Coinsnap) can generate an unlimited number of receiving Bitcoin addresses.
- The xpub cannot spend coins — it only allows creating new, unique receiving addresses.
- You stay in full control of your Bitcoin at all times.
- You never need to manually create a new on-chain address for every customer payment again — Coinsnap does this automatically.
- does not expose private keys
- does not allow spending
- but does allow generating new Bitcoin receiving addresses forever
Why Coinsnap Recommends Native SegWit (bc1q…)
Bitcoin supports several types of on-chain addresses. The newest and most efficient typestarts with:
bc1q…
Coinsnap recommends them because they offer:
- lower transaction fees
- modern and efficient design
- broad compatibility across all self-custodial wallets
- excellent future-proofing
If your wallet is using Native SegWit, the master public key will often be called:
- zpub (or sometimes still xpub, e.g. in Sparrow Wallet)
Coinsnap is able to generate correct bc1q on-chain addresses from either an xpub or a zpub— as long as the wallet uses the BIP84 standard.
How Coinsnap Uses Your xPub Key
Whenever a customer pays an on-chain Bitcoin invoice, Coinsnap automatically generates a new Bitcoin address derived from your xPub key.
The process:
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You save your xPub key inside your Coinsnap dashboard.
-
Coinsnap creates a new address for each incoming order.
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The customer pays directly to your self-custody wallet.
-
Coinsnap never holds or controls your funds.
You enjoy automated address generation while maintaining full control of your Bitcoin.
What Happens With Lightning vs. Bitcoin Payments?
Coinsnap supports both Lightning and On-Chain Bitcoin payments:
1. Lightning Payments
You must provide a Lightning Address when setting up your account.
All Lightning payments go directly to that wallet.
Examples:
2. On-Chain Bitcoin Payments
If you add your xPub key:
-
Lightning payments → go to your Lightning wallet
-
On-chain payments → go directly to your Bitcoin wallet
This cleanly separates your Lightning and On-Chain funds.
How to Add Your xPub Key in the Coinsnap Dashboard
For New Coinsnap Users
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Sign up or log in to Coinsnap.
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Enter your Lightning Address (required).
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Go to Settings → Wallet.
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Paste your xPub / zPub key.
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Save — done!
For Existing Coinsnap Merchants
Just go to:
Settings → Wallet → Add xPub Key
All future on-chain payments will now be sent directly to your wallet.
Wallets That Provide an xPub Key
Hardware Wallets (Recommended)
-
BitBox02
-
Ledger Nano S / X / Stax
-
Trezor One / Model T
Desktop Wallets
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Sparrow Wallet
-
Electrum
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Specter Desktop
Mobile Wallets
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BlueWallet (vault mode)
-
Nunchuk
-
Zeus (with your own node)
Wallets That Do Not Provide xPub Keys
-
Wallet of Satoshi (Lightning only)
-
Exodus
-
Coinbase / Binance (custodial, no self-custody keys)
Conclusion
xPub keys allow merchants to receive Bitcoin on-chain payments directly in their own self-custodial wallet — securely and without intermediaries.
With Coinsnap:
-
Lightning payments go to your Lightning address
-
On-chain payments are derived from your xPub key
This setup gives you complete control, maximum flexibility, and a clean separation between Lightning and Bitcoin funds.
