Address

An easy-to-share format of a locking script

Diagram showing an address being used to share a specific type of locking script.

An address represents a specific type locking script to be placed on some bitcoins.

It's basically a user-friendly encoding of either a public key hash or a script hash.

So when you give someone an address, you're asking them to lock up your bitcoins to a specific script pattern using the public key hash or script hash contained inside the address.

Usage

How are addresses used in Bitcoin?

Addresses are used when you want to send bitcoins to someone using a bitcoin wallet.

When you make a transaction using a bitcoin wallet, the wallet will decode the address to determine the type of locking script pattern to place on the output, and extract the public key hash or script hash and place that inside the ScriptPubKey.

For example, a 1address contains a public key hash and corresponds to a P2PKH locking script:

Diagram showing a 1address being decoded to a P2PKH locking script.

So addresses themselves do not appear inside the raw data in the blockchain – they are simply a user-friendly alternative to sending each other raw locking scripts.

Types

What are the different types of bitcoin addresses?

Different types of addresses correspond to different patterns of standard locking scripts.

Not all standard locking scripts have their own address. Only the most-commonly used locking scripts are assigned their own address format.

Do not use any of the addresses below. These are just examples, and you do not have the private key to be able to unlock any bitcoins sent to these addresses.

P2PKH

Base58

Example P2PKH Address:
1A44jeWg2qk3d1QrqvHEC9Kcwgzb6V3nNY
34 characters
Example P2PKH ScriptPubKey:
OP_DUP
OP_HASH160
OP_PUSHBYTES_20
634d7f7d05ed19747b92b6b5bc80c8acf547cd70
OP_EQUALVERIFY
OP_CHECKSIG
76a914634d7f7d05ed19747b92b6b5bc80c8acf547cd7088ac

A 1address contains a public key hash and corresponds to a P2PKH locking script.

The address is a Base58Check encoding of the public key hash. This also includes a version byte prefix of 00 to force the first character of the address to be a 1, which helps distinguish it from a similar-looking P2SH address.

Address (Base58)

These addresses are case-sensitive.

P2SH

Base58

Example P2SH Address:
38Na9NUxv523u44YKJqUTaAJnfvN1ByJaT
34 characters
Example P2SH ScriptPubKey:
OP_HASH160
OP_PUSHBYTES_20
494bdfc403424d55b995fa9ef47cb568a2d9e478
OP_EQUAL
a914494bdfc403424d55b995fa9ef47cb568a2d9e47887

A 3address contains a script hash and corresponds to a P2SH locking script.

The address is a Base58Check encoding of the 20-byte script hash. This also includes a version byte prefix of 05 to force the first character of the address to be a 3, which helps distinguish it from a similar-looking P2PKH address.

Address (Base58)

These addresses are case-sensitive.

P2WPHK

Bech32

Example P2WPKH Address:
bc1qkc845pqzg2d7k4fnke22mvz22t9jqlv6eepfse
42 characters
Example P2WPKH ScriptPubKey:
OP_0
OP_PUSHBYTES_20
b60f5a0402429beb5533b654adb04a52cb207d9a
0014b60f5a0402429beb5533b654adb04a52cb207d9a

A 42-character bc1address contains a public key hash and corresponds to a P2WPKH locking script.

The address is a Bech32 encoding of the full hex ScriptPubKey (which contains the public key hash). The address is always 42 characters in length, which helps to distinguish it from a similar-looking P2WSH address.

Address (Bech32)

P2WSH

Bech32

Example P2WSH Address:
bc1qyfqe8r9z79kua70kxvcuk358schf44x23zhhg2t6jdsl8zgkxu3stnnx75
62 characters
Example P2WSH ScriptPubKey:
OP_0
OP_PUSHBYTES_32
2241938ca2f16dcef9f63331cb4687862e9ad4ca88af74297a9361f389163723
00202241938ca2f16dcef9f63331cb4687862e9ad4ca88af74297a9361f389163723

A 62-character bc1address contains a script hash and corresponds to a P2WSH locking script.

The address is a Bech32 encoding of the full hex ScriptPubKey (which contains the 32-byte script hash). The address is always 62 characters in length, which helps to distinguish it from a similar-looking P2WPKH address.

Address (Bech32)

Purpose

Why do we use addresses in Bitcoin?

An address is a more convenient alternative to using raw locking scripts.

We could just send other people a complete locking script every time we want someone to "send" us some bitcoins, but this would be cumbersome, as the scripts would be unwieldy and mistakes are more likely to be made.

For example, if I wanted someone to send me some bitcoins, I could give them this complete locking script for them to use:

76a91404a621a724b8e064809d8fb22a65c2d37d01a01888ac

Alternatively, I could just give them this address instead:

1RainRzqJtJxHTngafpCejDLfYq2y4KBc

They both achieve the same result, but the address is shorter, more obvious, and easier to share.

An address is a short-hand way of writing locking scripts in a human-readable way.
echeveria, (on IRC)

Benefits

What are the features of bitcoin addresses?

There are a few benefits to using an address over a raw locking script:

  1. Error Detection. An address has a checksum built-in, which allows you to detect errors if the address has been input incorrectly, which helps to prevent you from sending bitcoins to an invalid address and losing the coins forever. This is the biggest advantage to using addresses, in my opinion.
  2. More Convenient. An address is shorter than a raw locking script and contains human-friendly characters (i.e. Base58, Bech32). This makes them easier to write down or share over the phone. It's not massively easier, but it is a slight improvement.
  3. Easily Identifiable. Addresses can be easily identified due to having standard character sets and structures. This helps you distinguish an address over other types of bitcoin data. Furthermore, different types of address correspond to different types of locking script, so wallets (and humans, with some practice) can determine the type of lock that will be placed on an output by simply looking at the address.

So again, an address is simply a user-friendly alternative to using raw locking scripts when we want to send or receive bitcoins.

History

Addresses have always been a part of Bitcoin.

Base58 Addresses

2009 - present

Example Address Script Type Active
1RainRzqJtJxHTngafpCejDLfYq2y4KBc P2PKH 2009 - present
3GTCwPn2EqSsAb3JDBo4WuwceVqkZjb83y P2SH 2012 - present

The first 1addresses were designed by Satoshi for use with P2PKH locking scripts. Satoshi wanted to have a way for people to easily send and receive bitcoins, so they designed an address format that is the Base58check encoding of a public key hash. These always start with a 1.

Satoshi chose to encode a public key hash as opposed to a raw public key to create shorter addresses.

This style of Base58 format for addresses was continued with the introduction of 3addresses by Gavin Andresen in 2012 for use with P2SH locking scripts. These use the exact same Base58, but they contain a script hash, along with a 05 prefix to change the leading character of the address to a 3.

These are the "old-school" style of addresses, but they can still be used today.

Bech32 Addresses

2016 - present

Example Address Script Type Active
bc1q5twnm8gznrszgxw0t258ejxgz9nwda6fpfl0wh P2WPKH 2016 - present
bc1qdj7v4lgweum6g8r8fjh5gedrwtg0pmf32uxnsvtf27adav96gftsudprkk P2WSH 2016 - present

The new Bech32 address format was introduced in the Segregated Witness upgrade of 2016. It was designed by Pieter Wuille and Gregory Maxwell (YouTube Video).

The Bech32 address format improves upon the Base58 address format by using an improved checksum algorithm, and uses a case-insensitive set of 32 characters.

This address format was introduced for the new P2WPKH and P2WSH locking scripts. These work in the essentially same way as the original P2PKH and P2SH locking scripts they replace, but they use the Witness field instead of the ScriptSig field for unlocking.

The Witness field takes up less space inside a block than the ScriptSig, so transactions that spend these new P2WPKH and P2WSH scripts pay comparatively less in transaction fees.

These are the "modern" style of addresses and are preferable over the old-school Base58 addresses.

Summary

I've said it many times already, but one more time for good measure: an address is just a user-friendly encoding of a locking script.

At first, you might think that an address is just an encoding of a public key, which is technically true to some degree, but to be more precise it's actually representing an instruction about the type and the contents of the locking script to be placed on an output.

This is because addresses can contain an encoding of a script hash or a public key hash, so they're not limited to locking outputs to public keys only.

If you're constructing raw transactions by hand then there isn't any need to use addresses, as they're not used internally in Bitcoin and do not appear in the blockchain. Instead, addresses are designed to be used externally for users when sending bitcoins via bitcoin wallets.

Nonetheless, it's good to get to grips with the different types of addresses and what they mean.