Bitcoin Address Types: Legacy, SegWit, and Taproot Explained and Compared
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Contents 4
The Bitcoin network has introduced several address types through ongoing technical upgrades. Each address type has its own pros and cons, and understanding them is very important for Bitcoin users.
The best-known Bitcoin address types today are Legacy, SegWit, and Taproot. In this post, we'll explain the differences between these three address types and compare their pros and cons in a table.
4 Common Bitcoin Address Types
| Address Type | Address Prefix | Pros | Cons |
|---|---|---|---|
| Legacy (P2PKH) | 1 | - Compatible with all wallets - Simple to use |
- High fees - Limited transaction throughput |
| Nested SegWit (P2SH) | 3 | - Multisig support - Can reduce fees |
- Possible compatibility issues with older wallets (rare in practice) |
| Native SegWit (P2WPKH) | bc1q | - Optimized transaction processing - Low fees - Improved scalability |
- Requires up-to-date wallets and services |
| Taproot (P2TR) | bc1p | - High level of security and privacy - Offers flexibility - Supports complex smart contracts |
- Limited compatibility - Not yet widely adopted |
- Legacy: The earliest Bitcoin address format. Legacy addresses start with 1. They offer the best compatibility, but relatively high fees are considered their main drawback.
- Nested SegWit: Supports multisig and can reduce fees, and starts with 3. It's a hybrid of SegWit and Legacy addresses, so compatibility is good. Nested SegWit was released for compatibility with the Legacy system before the SegWit upgrade rolled out.
- Native SegWit: Starts with "bc1q" and optimizes transaction processing, offering low fees and improved scalability. It's used as a SegWit-only address.
- Taproot: Starts with "bc1p". Introduced in 2021, this address type greatly improves transaction efficiency and privacy. However, its drawback is limited compatibility.
How to Choose a Bitcoin Address
The key factors to consider when choosing a Bitcoin address type are compatibility and fees. So in most cases, you can simply choose a SegWit address, which offers lower fees and faster transaction speeds.
One thing to watch out for, however: while most Bitcoin addresses are compatible with each other, some wallet clients or services don't support the newest address types. So you should choose the Bitcoin address type that fits your purpose and is supported by your wallet.
Can You Send Bitcoin Between Different Address Types?
Within the Bitcoin network, users can freely send bitcoin between Legacy, SegWit, and Taproot addresses. This is because the Bitcoin network uses the same underlying cryptography and protocol for all address types. So you can send bitcoin from a Legacy address to a Taproot address, or the other way around.
However, transaction fees and processing speed differ depending on the address type you send from. Using SegWit and Taproot addresses generally means lower fees and faster speeds compared with transactions using Legacy addresses. This is because SegWit and Taproot addresses use block space more efficiently.
Wrapping Up
The Bitcoin network supports a variety of addresses, such as Legacy, SegWit, and Taproot. Each one uses the same Bitcoin cryptography and protocol, which ensures overall compatibility.
Legacy addresses are the oldest type. They're stable and highly compatible, but their drawback is higher fees. Which address you choose should depend on what you're using it for, but the most commonly used type is the SegWit address, which offers low fees and fast transaction speeds. Taproot is an excellent technology, but it's often not supported.
