What are the three main Bitcoin address formats?

The three main Bitcoin address formats are P2PKH, P2SH, and bech32. Each of these formats serves a different purpose and has unique characteristics that distinguish them from one another.

What does P2PKH stand for?

P2PKH stands for Pay-to-Public-Key-Hash. It is the original and most common Bitcoin address format, which makes use of a hashed version of the public key for added security.

What does P2SH stand for?

P2SH stands for Pay-to-Script-Hash. This format allows for more complex transactions and is useful for creating multi-signature wallets or time-locked transactions. It can also support custom script conditions.

Bech32 is a more recent Bitcoin address format that is optimized for Segregated Witness (SegWit) transactions. It is designed to be more efficient and less prone to errors due to its use of error-correcting codes.

What is the main benefit of using P2PKH addresses?

The main benefit of using P2PKH addresses is their simplicity and widespread support. They are the original Bitcoin address format and are still widely used today, making them well-suited for beginners and users who want a straightforward experience.

Why would someone choose to use a P2SH address?

Someone might choose to use a P2SH address for its ability to support more complex transactions, such as multi-signature wallets or time-locked transactions. This format provides greater flexibility and functionality for users with specific needs or requirements.

What is the advantage of using bech32 addresses?

Bech32 addresses offer several advantages, including improved efficiency for SegWit transactions, fewer chances for errors due to their error-correcting codes, and slightly lower transaction fees. This format is an excellent choice for users who prioritize efficiency and error prevention.

Can I use all three address formats in the same wallet?

Yes, it is possible to use all three address formats (P2PKH, P2SH, and bech32) in the same wallet. Many modern wallet software programs support multiple address formats to cater to various user needs and preferences.

What Are the Differences Between Bitcoin Address Formats P2PKH, P2SH, and bech32?

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This is a straight to the point guide on the differences between the three (3) Bitcoin address formats — P2PKH, P2SH, and bech32.

Table of Contents show

Pay to Pubkey Hash (P2PKH)

“Pay to Pubkey Hash” (P2PKH) is the “legacy” Bitcoin address.

It starts with a “1” and is still compatible with Bitcoin today.

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Unfortunately, these address formats aren’t segwit compatible so transactions will cost more due to a larger size.

In summary: most compatible as it’s the original addressing scheme; the most expensive to use

Pay to Script Hash (P2SH)

“Pay to Script Hash” (P2SH) aka “nested segwit” starts with “3” and allow for multisig transactions — an upgrade over the legacy address type appearing above.

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In summary: lower fees, allow for multi-signature (MULTISIG) transactions; more expensive to use than bech32

Bech32

Bech32 aka “native segwit” is the newest Bitcoin address format. Addresses of this type start with “bc1” and are longer in length than P2PKH and P2SH addresses.

Bech32 is the preferred address format because transactions are engineered to use 16% less space and are therefore cheaper to use.

In summary: lowest transaction fees; case insensitive; not all wallets support it