Bitcoin has gained popularity worldwide, becoming a more and more used currency. Understanding Bitcoin addresses is the key to anyone who wants to get involved in this fascinating universe. Whether you are a new user or experienced investor, it is essential to know what types of addresses exist and how they can influence your experience. In this article, we will explore the five main types of Bitcoin addresses, the benefits of each variant and the best opportunities to use them.
1.
Legacy addresses, also known as P2PKH (Pay to Public Key hash) , were the first types of Bitcoin Create addresses. They start with the "1" figure and are used for sending bitcoin to public keys.
Use:
2. Segwit addresses (P2SH)
3. Segwit addresses (P2wpkh)
Use:
The P2WPKH addresses are ideal for users who want to take advantage of all the advantages of the Witness segment, including reduced commissions and faster transactions.
Example:
A segwit address (P2wpkh) could look like this: " BC1QW508D6QEJXTDG4Y5R3ZP3T5NRS0C5R3QVRTLSH ".
4. Taproot addresses (P2TR)
Taproot (P2TR) addresses are the latest developments in the field of Bitcoin addresses. They are designed to improve confidentiality and efficiency and allow the use of more sophisticated intelligent contracts.
Use:
Taproot is ideal for advanced users that require complex and flexible options when managing their Bitcoin funds.
Example:
A Taproot address could look like this: ` BC1P ... `, although the full format is not standardized due to the frequent network updates.
5. Lightning Network - Lightning address
Lightning Network is a quick layer 2 for Bitcoin , meant to allow fast and low cost transactions, without congesting the main blockchain. A lighting address is an address is an address with a specially used format to receive payments through Lightning Network.
Use:
Lightning addresses are ideal for traders who want to accept frequent payments without experiencing high waiting times .
Example:
The Lightning address has a similar format to " LNBC123 ... ".
Analysis of a Bitcoin address
A bitcoin address consists of several components, each having a specific role. Here is a short description:
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Prefix : indicates the type of address (for example, '1' for Legacy, '3' for P2sh, 'BC1' for P2WPKH).
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Hash of the public key : It is a encrypted version of your public key, used to identify the destination of the transaction.
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Checksum : It is a verification code that helps prevent errors.
These components are combined to form a unique address used in the Bitcoin network to send and receive funds.
What is a change address? (Rest address)
A Change address is a bitcoin address whose funds are used to return the unused amounts from a transaction.
In a Bitcoin transaction, the concept of inputs (inputs) and outputs (outputs) . If Mihai has a 1 BTC input (an amount of a Utxo-Unspent Transaction Output) and wants to send Flavia 0.5 BTC, he cannot "cut" exactly 0.5 BTC from that input. The transaction uses the entire input of 1 BTC, and the difference (0.5 BTC) is sent to a change address that Mihai controls.
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Input : 1 BTC (from Mihai's address).
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Output:
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0.5 BTC to Flavia.
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0.5 BTC to a Change address (a new address controlled by Mihai).
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Fee : A small part of the transaction is used for miner fees.
The Change address is automatically generated by Mihai's wallet, and it controls it. This mechanism ensures that unused funds are not lost.
Use:
This address is essential for efficient funds management. Understanding this concept helps users optimize transactions and maintain control over financial resources.
end
Knowing Bitcoin addresses is essential for anyone who integrates Bitcoin into their financial life. Each type of address has specific characteristics, advantages and uses. The correct choice can significantly influence your experience in this digital ecosystem.
If you want to check a transaction that has reached the destination you can access a blockchain explorer such as blockchair or coin.cz. In the situation where you want to view a short guide on how to see how to check an address we recommend you to check the point 5 of the article .
