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Address Formats of Bitcoin: A Beginner Guide

Understanding the different address formats is essential for users to navigate the Bitcoin ecosystem effectively. In this article, we will delve into the intricacies of deciphering Bitcoin’s address formats, exploring the legacy format, the Segregated Witness  format, the Bech32 address format, and the multi-signature address format. By the end of this guide you will know the basics of Bitcoin address formats. Also, pay some attention to Immediate Iplex for some pro level trading.

Legacy Bitcoin Address Format (P2PKH)

The legacy Bitcoin address format, known as Pay-to-Public-Key-Hash (P2PKH), is the original and most widely used format for Bitcoin addresses. These addresses are composed of a series of alphanumeric characters and begin with the number 1. Legacy addresses are generated from the public key associated with a Bitcoin wallet.

Legacy addresses have been in existence since the early days of Bitcoin and have established a track record of reliability and security. They have been extensively tested and proven to be a secure method for storing and receiving Bitcoin. Many users are accustomed to using legacy addresses and continue to rely on them for their transactions.

However, legacy addresses do have some limitations. One of the drawbacks is their larger size compared to newer address formats. The larger size of legacy addresses means that they occupy more space on the blockchain, which can impact scalability. With limited block space available, larger legacy addresses can lead to increased transaction fees and longer confirmation times.

Another limitation of legacy addresses is their lack of support for advanced features such as Segregated Witness (SegWit). SegWit is an upgrade to the Bitcoin protocol that aims to improve scalability and transaction malleability. Unfortunately, legacy addresses cannot directly take advantage of the benefits offered by SegWit, such as lower fees and increased transaction throughput.

Segregated Witness (SegWit) Address Format

Segregated Witness (SegWit) is a significant upgrade to the Bitcoin protocol that introduced a new address format. SegWit addresses begin with the number 3 and were designed to address the scalability and transaction malleability issues associated with legacy addresses.

One of the key advantages of SegWit addresses is the potential for lower transaction fees. By segregating the transaction signature data from the transaction itself, SegWit allows for more efficient use of block space. This efficiency translates into reduced fees for users, making Bitcoin transactions more cost-effective.

In addition to lower fees, SegWit addresses contribute to the overall scalability of the Bitcoin network. By increasing the block size limit without requiring a hard fork, SegWit allows for a higher volume of transactions to be processed within a single block. This increased transaction throughput improves the overall efficiency of the Bitcoin network.

Bech32 Address Format (Native SegWit)

One of the key advantages of Bech32 addresses is increased error detection. The format incorporates a built-in error-checking mechanism that helps prevent accidental typos when entering the address. This feature enhances the overall reliability of transactions and reduces the risk of funds being sent to the wrong address.

Another benefit of Bech32 addresses is there more compact representation compared to legacy and SegWit addresses. The compactness of Bech32 addresses allows for more efficient use of block space, resulting in lower transaction fees. 

Bech32 addresses are designed to be human-readable, making them user-friendly and easier to work with. They provide a clear distinction between lowercase and uppercase letters, eliminating confusion that may arise from similar-looking characters. This readability feature enhances the overall user experience and reduces the risk of errors in address entry.

Multi-Signature (Multi-Sig) Address Format

Multi-signature (multi-sig) addresses are a unique type of Bitcoin address that require multiple signatures to authorize a transaction. These addresses provide an added layer of security and are commonly used for escrow services, joint accounts, or situations where multiple parties need to approve a transaction.

To create a multi-sig address, multiple public keys are combined, and a specific threshold is set to determine the number of signatures required for a transaction to be valid. For example, a 2-of-3 multi-sig address would require any two out of three authorized parties to sign off on a transaction.

Multi-sig addresses offer increased security by distributing the trust among multiple parties. This mitigates the risk of a single point of failure and provides enhanced protection against unauthorized transactions or malicious actors. Multi-sig addresses can be particularly useful for businesses and organizations that require additional security measures for managing their Bitcoin holdings.


The legacy address format has stood the test of time, while SegWit addresses offer improved scalability and lower transaction fees. Bech32 addresses bring enhanced error detection and compactness, and multi-sig addresses provide an additional layer of security. By understanding and choosing the right address format, users can enhance their Bitcoin experience and stay up-to-date with the evolving landscape of cryptocurrency.