Types of Bitcoin Addresses
There are 3 types of addresses:
P2PKH or Legacy Address (outdated address format)
This is the first version of the Bitcoin address, which starts with the number “1” and has 26 to 36 characters. The average fee when sending from a P2PKH address is usually higher than when sending from a Segwit address because transactions with outdated addresses are larger in size.
Example: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa
P2SH
A new type of address, structured similarly to P2PKH, but starts with “3” instead of “1”. P2SH provides more complex functionality than the previous type of address. To spend bitcoins sent through P2SH, the recipient must provide a sсript matching the sсript hash and data, making the sсript valid. However, all a regular user needs to know is that using this type of address instead of P2PKH, the average transaction fee will be lower.
Example: 3GRdnTq18LyNveWa1gQJcgp8qEnzijv5vR
P2WPKH or Bech32
This is an advanced type of address used to reduce the size of blockchain blocks to speed up transaction response times. Addresses start with “bc1” and are longer than P2PKH and P2SH. Bech32 is the native Segwit address format (though P2SH can also be a Segwit address), so when talking about using Segwit addresses, Bech32 is usually meant. The advantage is the lowest transaction fee and the highest processing speed. The disadvantage of such addresses is that not all wallets and systems support it yet.
Example: bc1qnkyhslv83yyp0q0suxw0uj3lg9drgqq9c0auzc
At CrystalTrade, Bech32 addresses are used by default because our team supports the adoption of new technologies.
Comparative Efficiency Table of Address Types
For simplicity, we use the following abbreviations:
- I – P2PKH, address starts with “1”
- II – P2SH, address starts with “3”
- III – Bech32, address starts with “bc1”
| Sender Address Type | Receiver Address Type | Average Transaction Weight | Conclusion |
|---|---|---|---|
| I | I | 764 | The most inefficient transaction, the sender’s address type plays a key role, the receiver’s address affects efficiency insignificantly in all examples |
| I | II | 756 | |
| I | III | 752 | |
| II | I | 541 | Transactions with a P2SH sender address are more than 29% cheaper than with an outdated P2PKH address |
| II | II | 533 | |
| II | III | 529 | |
| III | I | 449 | Transactions with a Bech32 sender address are more than 40% cheaper than with an outdated P2PKH address; and more than 15% cheaper than with a P2SH address |
| III | II | 441 | |
| III | III | 437 |