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Bitcoin Address Types Explained: Legacy, SegWit, Native SegWit & Taproot

Glyntex Team

• 2 min read

Bitcoin addresses are not all the same. There are four main types, each with different formats, fees, and compatibility. If you've ever wondered why some addresses start with "1", others with "3" or "bc1q", and newer ones with "bc1p", this guide explains everything clearly.

Why Different Address Types Exist

Bitcoin's protocol has evolved over time. Each address type represents an upgrade to how Bitcoin transactions are structured and validated. Newer types generally offer lower fees and improved functionality, but older types are still valid — Bitcoin is backwards compatible by design.

1. Legacy Addresses (P2PKH) — Starts with "1"

Example: 1A1zP1eP5QGefi2DMPTfTL5SLmv7Divf

This is the original Bitcoin address format, dating back to 2009. Legacy addresses use Pay-to-Public-Key-Hash (P2PKH) script. They work on every exchange and every wallet ever built, making them the most universally compatible option.

Pros: Universal compatibility
Cons: Higher transaction fees than newer formats, no SegWit benefits
Use when: Sending to very old wallets or systems that don't support newer formats

2. SegWit Addresses (P2SH) — Starts with "3"

Example: 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy

P2SH (Pay-to-Script-Hash) addresses were introduced to support SegWit transactions and multisig setups while remaining backward compatible with wallets that don't natively support SegWit. They're sometimes called "wrapped SegWit."

Pros: Lower fees than Legacy, compatible with most modern exchanges
Cons: Slightly higher fees than Native SegWit, slightly less efficient
Use when: You need SegWit benefits but the receiving wallet doesn't support Native SegWit

3. Native SegWit Addresses (P2WPKH) — Starts with "bc1q"

Example: bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq

Native SegWit (Bech32 format) is the most common format recommended for new wallets today. It provides the full fee savings of SegWit — typically 20-30% lower fees compared to Legacy — while being natively supported by all modern wallets and most exchanges.

Pros: Lowest fees among the first three types, error detection built in, widely supported
Cons: Some older exchanges and wallets still don't support sending to bc1q addresses
Use when: General use — this should be your default in 2026

4. Taproot Addresses (P2TR) — Starts with "bc1p"

Example: bc1p5d7rjq7g6rdk2yhzks9smlaqtedr4dekq08ge8ztwac72sfr9rusxg3297

Taproot was activated in November 2021 (Bitcoin block 709,632) and represents the most significant upgrade to Bitcoin's scripting capabilities since SegWit. Taproot addresses look like Native SegWit (Bech32m format) but start with "bc1p" instead of "bc1q".

Taproot improves privacy by making complex transactions (multisig, Lightning, time-locked contracts) look identical to simple transactions on-chain. It also enables more efficient scripting and is the foundation for future upgrades.

Pros: Best privacy, enables advanced scripting, similar or slightly better fees than Native SegWit
Cons: Not yet supported by all exchanges for deposits/withdrawals (improving in 2026)
Use when: Your wallet supports it and you're transacting between modern wallets

Which Address Type Should You Use?

For most users in 2026:

  • Default choice: Native SegWit (bc1q) — best balance of fees, compatibility, and support
  • If your wallet supports it: Taproot (bc1p) — better privacy and future-proof
  • For sending to old platforms: Legacy (1...) — only if required by the receiving party

Hardware Wallets and Address Types

Both Trezor and Ledger hardware wallets support all four address types. When setting up a new wallet, both now default to Native SegWit, with Taproot available in their respective companion apps. If you're using Trezor Suite or Ledger Live, you can choose your preferred address type in the account settings.

A Note on Compatibility

You can send Bitcoin between different address types freely — a Legacy address can receive from a Taproot address and vice versa. Address types are about the sender's script structure, not the receiving wallet's "type." The only practical limitation is whether the sending platform supports generating a transaction to the address format you're receiving on.

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