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In the world of digital currencies, BITCOIN is undoubtedly the most dazzling star.
When we open the Web3 wallet of the exchange, we will find that there are four BITCOIN address formats to choose from:
Legacy, Native SegWit, Nested SegWit, and Taproot.
What are these four formats, and how should we choose the one that suits us best?
First, let's get to know the "elder" of BITCOIN - the Legacy address.
Since SATOSHI NAKAMOTO invented BITCOIN in 2009, this address format has been in use, and its status is deeply rooted. Its addresses usually start with "1", such as "1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa". The biggest advantage of the Legacy address is its strong compatibility, as almost all exchanges and wallets support it. However, it is worth noting that the cost of using this address is relatively high, and the miner's fee is more expensive. So if you need to transact with those using old wallets that do not support the new formats, the Legacy address is the safest choice.
Next is the Native SegWit address, also known as the Bech32 address, which is the innovative result of the Segregated Witness era.
Its addresses start with "bc1", like "bc1qw508d6qejxtdg4y5r3zarvary0c5xw7kygt080". The biggest advantage of the Native SegWit address is that it can save users miner's fees, as it occupies less block space. Moreover, it supports more functions, and for those who like to try new things, frequently make BITCOIN transfers, and want to save on fees, it is a very good choice.
Then there is the Nested SegWit address, which is like a bridge between tradition and modernity.
The addresses usually start with "3", such as "3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy". The feature of this address format is that it cleverly integrates the SegWit technology into the traditional address, allowing old wallets and exchanges to also support it. Therefore, for those who want to save on miner's fees but have to face the situation where the other party is using an older wallet, the Nested SegWit address can strike a balance between compatibility and cost savings.
Finally, there is the Taproot address, which is the major upgrade of BITCOIN in 2021, leading BITCOIN into the "smart era".
Its addresses start with "bc1p", such as "bc1p5cyxnuxmeuwuvkwfem96l4yx2z3me9wtvfgkv7". The Taproot address has significant improvements in security, efficiency, and privacy, and is particularly suitable for those who are concerned about privacy protection and want to explore more of BITCOIN's future smart features.
Although these four address formats can all be calculated from the same public key, most HD wallets, including OKX, use different derivation paths, resulting in different public keys for each address. Moreover, the BITCOIN ecosystem can also generate different addresses such as DOGECOIN addresses and LITECOIN addresses from the same public key.
In practical application, the choice of address format mainly depends on your specific needs and usage scenarios.
If you pursue the maximum compatibility, especially when transacting with unfamiliar counterparties, the Legacy address may be the best choice.
If you want to save on miner's fees and your wallet and exchange support it, the Native SegWit address can help you reduce costs.
When you need to find a balance between compatibility and cost savings, the Nested SegWit address will be a good compromise.
For those who are brave enough to try new technologies, focus on privacy and future features, the Taproot address is the choice at the forefront.
These four BITCOIN address formats reflect the continuous development and innovation of BITCOIN technology.
Understanding their characteristics and applicable scenarios can help us transact and manage assets more conveniently and efficiently in the world of BITCOIN.
Whether you are a long-term BITCOIN holder or a new beginner in this field, choosing the right address format is a crucial step.
Okay, that's all I have to share today. Interested friends, please follow us!
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