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@ Disturbia
2023-08-19 15:27:14
**Introduction**
Bitcoin is a blockchain technology which has been running since 2009. Ever since Satoshi Nakamoto has left the project, the Bitcoin blockchain has been running stable without a single episode of failure. However, changes are needed for various reasons; to reduce transaction costs or to add functionality to the blockchain. These changes, nevertheless should not compromise users who prefer to use the original blockchain. As a win-win solution, soft-forks are implemented. soft-forks are bitcoin improvement that is activated as an opt-in; should the user or client choose to accept it, it will bring extra functionality to them. here we will explore how these soft-forks impacted the address design of your Bitcoin wallet.
**1. Legacy address**
Legacy address are the original Bitcoin address. the address starts with "1" as shown below:
1JQe8QcouwvqBD3KBfXsGXeUHV1Aw9ddp8
these address has no added functionality and transaction using this address cost the most transaction fee.
**2. Pay to script hash (P2SH) address**
These kind of address has scripts that specify certain transactional condition, which could include a segwit functionality. it starts with a "3" such as:
34BYTiqoTunKEjNoPLjMYCk6WPNvUy4khV
transaction on this address is 26% cheaper than legacy address.
**3. Segwit address**
segwit is a block rearrangement mechanism whereby the signature is collected and combined outside of the blockchain. This not only obsfucate the transaction, it also make the transaction more compact, reducing transactional cost altogether
*Image1: Segwit moves the signature to one end, improving transaction size*
a segwit address starts with a "bc1q" such as :
bc1qav04kv6k2dq8whxw9zyf5zw3c8ecyhrk6rf2yw
a transaction using segwit addresses are 38% cheaper than a legacy address transaction.
**4. Taproot address**
Taproot is a technology that allows batching of multiple signatures and transactions together, making it easier and faster to verify transactions on Bitcoin's network. Not only transaction will be cheaper, it also allow the attachment of additional data. such innovation has allowed the birth of several innovations, such as the ordinals. A taproot address starts with a "bc1p" such as :
bc1pmzfrwwndsqmk5yh69yjr5lfgfg4ev8c0tsc06e
their transaction fee cost is similar to segwit, though their functionality differs. however, the support for taproot addresses are currently still limited.