ZoneBitcoin EditorialBitcoin, the most popular cryptocurrency, is based on a decentralized network and uses a distributed ledger technology called blockchain. To transact on this network, users need Bitcoin addresses.
These addresses are essential for sending and receiving funds securely. However, there are several types of Bitcoin addresses, each with specific characteristics. In this article, we will explore in detail the different Bitcoin addresses and how they work.
However, it is important to know before you begin that all bitcoin addresses are valid. You can use them all the same way because they are all inter-compatible.
1. Classic Bitcoin address called “Legacy” (P2PKH)
Addresses start with the number 1.
Example: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa (This is Satoshi Nakamoto's address).
The classic Bitcoin address, also known as the Legacy address, is the first type of address created for the Bitcoin network. It starts with the number “1” and is made up of alphanumeric characters. These addresses are compatible with most wallets and exchanges, but they have a limitation in terms of functionality and security.
2. Pay to Script Hash address (P2SH)
Addresses start with the number 3.
Exemple : 3AqGic1Hpt1vExKdy6JdKvvj8iemtYJCJD
Unlike legacy addresses, pay-to-script-hash addresses do not correspond to the hash of the public key, but are derived from a script that involves spending conditions that are hidden from the sender. These spending conditions can be very simple (the owner of public key A can spend this bitcoin), or rather complex (the owner of public key B can spend this bitcoin after X time if he reveals a predetermined code) .
Using this script, P2SH addresses can even use followed and enable savings in transaction fees. P2SH addresses are around 30% cheaper than legacy addresses.
2. Bitcoin address format Native SegWit (P2WPKH)
Addresses in native SegWit format start with bc1.
Exemple : bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq
The Segregated Witness (SegWit) format is an upgrade to the Bitcoin protocol that was introduced to address certain issues, including the problem of scalability of bitcoin.
P2WPKH addresses always start with “bc1q” and are generally shorter than P2PKH and P2SH addresses. Using these addresses unlocks the benefits of SegWit, including lower transaction fees and improved network efficiency.
4. Taproot Address (P2TR)
Taproot addresses start with bc1p.
Example: bc1pmzfrwwndsqmk5yh69yjr5lfgfg4ev8c0tsc06e
A Bitcoin Taproot address is a type of Bitcoin address that is based on the Bitcoin Improvement Proposal (BIP ) called Taproot. This proposal aims to improve the privacy, efficiency and flexibility of transactions on the Bitcoin network.
Taproot addresses start with “bc1p”. This means that Taproot addresses use Bech32, a native address format SegWit (Segregated Witness).
This is a relatively recent improvement and only the most advanced wallets offer this type of address.
The particularity of lightning addresses
Le Lightning Network is a Bitcoin blockchain scaling solution, enabling fast, low-cost transactions outside of the main blockchain. Bitcoin Lightning Network addresses are used to facilitate these instant, off-chain payments. Thus, it is possible with lightning addresses on certain applications to create personalized addresses that look like email addresses.
This can be very practical for micropayments or donations or even for beginners. Apps like GetAlby allows you to create Lightning addresses of this type and interact with other protocols like Nostr for example.
Final word
Finally, Bitcoin addresses allow users to transact securely and transparently. Over time, several types of addresses have been developed to improve the efficiency, security, and privacy of transactions.
Whatever Bitcoin address you choose, it is important to take steps to protect your private keys and use reliable wallets to manage your funds.
As such, we recommend that you read these two articles:
- Here are 12 tips to secure your seed sentence and sleep in peace
- The 6 best “Open Source” physical wallets to store your bitcoins and cryptos
Users must also stay informed of technological developments to adapt to new security and performance standards.
If you have any questions or need help better understanding Bitcoin addresses and their usage, feel free to check out other articles on the subject on this blog. Investing in digital assets carries risks, so exercise caution and only spend what you can afford to lose.
FAQ
How to identify the bitcoin address format?
You can identify the type of a bitcoin address by looking at the first letters of it. If it starts with “1”, this is the oldest format for bitcoin addresses. If it starts with “3”, it is a P2SH address. If it starts with “bc1q”, it is a native segwit and if the first 4 letters are “bc1p”, it is a taproot address.
How to get a bitcoin address?
It's easy to create a bitcoin address as you have one directly when you create a wallet. So you can create as many different bitcoin addresses. It is even recommended, for reasons of confidentiality, not to reuse a single address. It is indeed preferable to use new addresses for each transaction.
What is the best bitcoin address to use?
In general, bitcoin wallets default to native SegWit bech32 addresses because these are the addresses that provide the greatest savings.
