Bitcoin is a decentralized digital currency that operates without a central bank or single administrator. Transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain. One of the essential components of the Bitcoin ecosystem is the Bitcoin address. A Bitcoin address is a string of alphanumeric characters that represents a public key used to receive Bitcoin transactions. In this article, we will discuss the different types of Bitcoin addresses.
Legacy Bitcoin Address (P2PKH)
The Legacy Bitcoin address is the original Bitcoin address format that starts with the number "1". This address type is still widely used today and is compatible with most wallets and exchanges. It is also known as Pay-to-Public-Key-Hash (P2PKH) address.
Segregated Witness (SegWit) Address (P2SH)
The Segregated Witness (SegWit) address format was introduced to solve some of the scalability issues of Bitcoin. It starts with the number "3" and is compatible with most modern wallets and exchanges. It is also known as Pay-to-Script-Hash (P2SH) address.
Native SegWit Address (Bech32)
The Native SegWit address format is the newest and most advanced Bitcoin address format. It starts with "bc1" and offers faster transaction times and lower fees than the previous formats. It is also known as Bech32 address.
Multi-signature Address (P2SH-P2MS)
A Multi-signature address allows multiple parties to sign transactions, adding an extra layer of security. It starts with the number "3" and is also known as Pay-to-Script-Hash Multi-Signature (P2SH-P2MS) address.
Non-Spendable Address
A Non-Spendable address is a type of Bitcoin address that cannot be used to spend funds but can be used to receive funds.
Vanity Address
A Vanity address is a Bitcoin address customized to include a specific word or phrase, making them easier to remember or more appealing to use.
Pay-to-Public-Key (P2PK) Address
A Pay-to-Public-Key (P2PK) address format is rarely used and is not recommended due to security concerns. It starts with the number "4".
Hierarchical Deterministic (HD) Address
A Hierarchical Deterministic (HD) address format allows for the creation of multiple addresses from a single master seed, making it easier to manage and secure Bitcoin holdings.
Watch-Only Address
A Watch-Only address is a type of address that can be used to track the balance and transaction history of a Bitcoin address without having access to the private key.
Payment Protocol (BIP70) Address
A Payment Protocol (BIP70) address allows for the creation of payment requests that include additional information, such as payment details and refund addresses, making it easier to transact with merchants.
In conclusion, understanding the different types of Bitcoin addresses is essential to ensure that you are using the correct one for your needs. Each address type serves a specific purpose and has its unique advantages and disadvantages. It's crucial to keep in mind that all of these addresses are just representations of the public key used to receive Bitcoin transactions, and the private key is what's used to sign transactions and spend the Bitcoins in the address
