Why Does BTC Have Different Address Formats?
Last updated
Last updated
The variety of Bitcoin address formats stems from ongoing technical upgrades aimed at overcoming early network limitations, such as transaction speed, fees, and scalability. Innovations like SegWit were introduced to improve transaction efficiency and security while supporting additional features. At the same time, compatibility with older address formats was maintained. The evolution of address formats reflects Bitcoin’s continuous adaptation and optimization to meet changing user needs.Common BTC Address Formats and Their Uses
Type | Address Format | Features | Recommended Use |
Legacy (P2PKH/P2SH) | Starts with "1" | Original Bitcoin address format, fully functional. Larger transaction size and higher fees compared to newer formats. | Interaction with older wallets or services that don't support SegWit. |
Nested SegWit (P2SH-P2WPKH) | Starts with "3" | A compromise between traditional address compatibility and improved efficiency. Smaller transaction size and lower fees than legacy addresses. | For users needing compatibility with older wallets/services but still want some benefits of SegWit. |
Native SegWit (P2WPKH) | Starts with "bc1" | Offers the highest transaction efficiency with the smallest transaction size and lowest fees. Includes enhanced security features, reducing network congestion caused by block size limits. | For maximizing efficiency, scalability, and transaction throughput, while minimizing fees and network congestion. |
Users can first navigate to the wallet page, select cryptocurrency, and then click on the address option on the right to view the addresses generated by your wallet for that specific cryptocurrency.
After entering the address page, you can differentiate which address is your default payment or receiving address by checking the tags. There are currently five tags available:
Default Receiving: This address is set as the default receiving address.
Default Payment: This address is set as the default payment address.
Standard Address: This is a standard BTC address.
SegWit (Compatible): This address is in the SegWit (Compatible) format.
SegWit (Native): This address is in the SegWit (Native) format.
If you need to add a new address, click the plus icon in the top right corner. You can choose either a SegWit (Compatible) or SegWit (Native) address. After selecting, you can enter an alias for the new address.
To set a default receiving or payment address, hover over the address, click "More," and then select "Set as Default Payment/Receiving Address."
After the setup is complete, the user can also see the format of this address in the receiving section.
