Bitcoin addresses, composed of 26-35 alphanumeric characters, are essential for sending and receiving BTC. While any address can technically transfer funds, wallets and exchanges support different formats, making it crucial to understand their variations.
Legacy (P2PKH) Addresses
P2PKH (Pay-to-Pubkey Hash) addresses start with the digit "1". As the original Bitcoin address format, they remain widely used by older wallets and mining pools. However, legacy addresses are not SegWit compatible, leading to larger transaction sizes and higher fees compared to newer formats. Example: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2.
P2SH Addresses
P2SH (Pay to Script Hash) addresses begin with "3". They enable advanced functionality such as multisignature transactions and can wrap native SegWit addresses (P2WPKH-in-P2SH). P2SH is the most commonly supported format across exchanges and wallets today, offering a balance between compatibility and cost. Example: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy.
Bech32 Addresses (Native SegWit)
Bech32 addresses start with "bc1" and represent the native SegWit format. They produce the smallest transaction sizes and lowest fees among all formats. Most modern software wallets (e.g., Electrum, BlueWallet) and hardware wallets (e.g., Trezor, Coldcard) support Bech32, but some exchanges and older devices (e.g., Ledger Nano S via legacy firmware) lack compatibility. Currently, less than 1% of Bitcoin is held in Bech32 addresses, though adoption is gradually rising.
Bitcoin Cash (BCH) Address Formats
Bitcoin Cash uses either the legacy format (starting with "1") or Cash Address (Cash Addr) that begins with "q" or "bitcoincash:q". Cash Addr, derived from Bech32, helps prevent accidental cross-chain transfers to BTC addresses. Most BCH wallets support both formats and allow users to switch between them.
How to Choose
For everyday transactions, Bech32 minimizes fees when your wallet and exchange support it. P2SH is ideal for multisig needs and maximum compatibility, while P2PKH remains functional for legacy users. Understanding these trade-offs empowers you to select the right address format, ensuring efficient and secure Bitcoin management.