2.8 Bitcoin Address Types Explained

Bitcoin addresses are the 'account numbers' you send coins to. Over the years, several formats have appeared as the protocol upgraded. You can spot the type by the first character or two:

Starts with '1' — Legacy. The original format from 2009. Still works, but transactions sending from it cost the most in fees.

Starts with '3' — Older multisig or 'wrapped' SegWit. A transition format used by exchanges for years.

Starts with 'bc1q' — Native SegWit. The 2017 upgrade. Noticeably cheaper fees and the format most modern wallets use.

Starts with 'bc1p' — Taproot. The newest format (2021). Cheapest to spend from, best privacy, and supports the Schnorr signatures we just covered.

Practical tip: all formats can send to each other freely, but when you're choosing an address for your own wallet, prefer 'bc1q' or 'bc1p' so future transactions cost less. If you have older coins sitting at a '1...' address, just sending them to a newer-format address upgrades you.