Bitcoin is the world’s first cryptocurrency, and at the heart of using it are wallet addresses. A Bitcoin address works like your account number, it’s where you send, receive, and store BTC. But not all Bitcoin addresses look the same. Over the years, different types of addresses have been developed to improve efficiency, security, and usability.
In this article, we’ll break down the main types of Bitcoin wallet addresses, explain how they work, and share examples so you can recognize them easily.
1. Legacy Addresses (P2PKH)
- Format: Start with the number “1”
- Example:
1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa - Details:
- Legacy addresses are the original Bitcoin address format, also called Pay-to-PubKey-Hash (P2PKH). They are widely supported by all wallets and exchanges but come with higher transaction fees compared to newer address formats.
2. Script Addresses (P2SH)
- Format: Start with the number “3”
- Example:
3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy - Details:
- Script addresses, or Pay-to-Script-Hash (P2SH), allow more complex transactions such as multi-signature wallets. They were introduced to make Bitcoin more flexible. Transaction fees are generally lower than legacy addresses but higher than newer SegWit addresses.
3. Bech32 Addresses (SegWit)
- Format: Start with “bc1”
- Example:
bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq - Details:
- Bech32 addresses are also called Segregated Witness (SegWit) addresses. They are designed to reduce transaction size, which means lower fees and faster processing. They are becoming the preferred format for most modern wallets.
4. Taproot Addresses (P2TR)
- Format: Start with “bc1p”
- Example:
bc1p5cyxnuxmeuwuvkwfem96llytnxyn8j6l3c3a8d - Details:
- Taproot is the most recent upgrade to Bitcoin addresses. It improves privacy, scalability, and efficiency. With Taproot, complex transactions appear similar to simple ones, making it harder to distinguish transaction types on the blockchain.
While all formats can send and receive Bitcoin, newer addresses like Bech32 and Taproot offer lower fees and better features.
When creating a Bitcoin wallet, it’s useful to know which type of address you’re using, especially when sending BTC between exchanges and wallets. Choosing the right one can save you money and give you access to the latest improvements in the Bitcoin network.
