Bitcoin Address Types Explained (2026)

If you've looked at a few Bitcoin addresses, you may have noticed they don't all look the same — some start with a '1', others with a '3', and newer ones with 'bc1'. These are different address formats that Bitcoin has introduced over the years as the protocol improved. They all do the same basic job — they're destinations you can send bitcoin to — but the format affects transaction fees, available features, and occasionally compatibility with older software.

The original format, now called 'legacy' (technically P2PKH), starts with the number '1'. It works everywhere and has existed since the beginning, but it's the least efficient: transactions spending from legacy addresses take up more space and therefore cost higher fees. There's nothing unsafe about it, but for most users it is simply outdated compared with what came later.

SegWit (Segregated Witness), introduced in 2017, made transactions smaller and cheaper. It appears in two forms: 'nested' SegWit addresses start with a '3' and were a compatibility-friendly stepping stone, while 'native' SegWit addresses start with 'bc1q' and are more efficient still. Native SegWit is the most widely used format today and a sensible default — lower fees, broad support, and understood by virtually all modern wallets and exchanges.

Taproot, activated in 2021, is the newest upgrade, and its addresses start with 'bc1p'. Taproot brings improved privacy and more flexible smart-contract capabilities, and can be even more efficient for certain transactions. Support is now widespread but slightly less universal than native SegWit, so a few older services may not yet let you withdraw to a 'bc1p' address. Over time it is expected to become a standard option everywhere.

The practical points are simple. You can send between any of these formats freely — a legacy wallet can pay a Taproot address and vice versa — so you're never locked in. If a service refuses an address, it's usually because it doesn't yet support the newest format, in which case using a 'bc1q' (native SegWit) or even a '3' address solves it. And always copy addresses by paste or QR code rather than typing them, and check the first and last few characters, since address-swapping malware does exist. This is educational information, not financial advice.