A no-brainer guide to BTC address formats every Bitcoiner should know about

Why there are different formats?

How did they emerge?

What to know about them?

🔵 The address format refers to the address that’s used to receive #Bitcoin payments. When someone wishes to receive a payment in Bitcoin, that’s the address s/he provides to the sender.

🔵 Today, Bitcoin has 3 address formats. New formats were introduced to make Bitcoin easier and cheaper to use. A wallet using a newer format for receiving payments will result in cheaper payments when a wallet owner decides to send Bitcoins from that wallet.

🔵 Older format (aka BIP44 or P2PKH): This is one of the first formats adopted by older wallets. These addresses start with “1…”. Sending a payment from a wallet that operates with BIP44 format is more expensive than when using a wallet operating with newer formats.

🔵 Newer format (aka BIP49, Segwit, or P2SH): A more recent format, usually starts with a number “3….”. A wallet operating with this format will result in cheaper outgoing transaction fees for its owner in comparison to the older format.

🔵 Newest format (aka BIP84, Native-Segwit, bech32 …): The cheapest to work with when it comes to transacting on the Bitcoin network. The bech32 address format starts with “bc1…”.

🔵 To find out which format your wallet uses check the first symbol of the address your wallet shows for incoming payments.

🔵 Most wallets use BIP49 or BIP84 format by default and support using just one format. Some like #unstoppablewallet support using any (or all three) within a single wallet. Users can have 3 different Bitcoin balances (corresponding to each address type) within a single wallet.

🔵 Apart from the difference in transaction fees, there is one thing to keep in mind. When importing a Bitcoin wallet from one app to another the target wallet should support the format of the user’s previous wallet or else it won’t be able to discover the balance/transactions of the user.

Peace! Keep Learning!