1. What is a bitcoin legacy address?
A legacy address is a standard bitcoin address suggested by Satoshi Nakamoto. This format is otherwise known as P2PKH (Pay To Public Key Hash) because it requires a signature computed from the private key and a public key from the recipient. The exit transaction script uses cryptographic functions to check them against the public key hash – and if they match, it allows the funds to be spent. The probability that the system will accept an incorrectly typed address is 1 in 232 degrees, i.e. one in 4.29 billion.Legacy address can be recognized by prefix 1 (and m or n in the test network). The main disadvantages of this address include register sensitivity when entering data, higher transaction fees, lower speed of double hashing of the checksum, heavier weight in QR codes and inconvenient to write on a mobile device or on paper.
Example legacy address: 1BUrDeWstWetqBFn5Au8m4JFg2xJaKVN4
2. What are the parts of a bitcoin legacy address?
Legacy addresses are unique, usually consisting of 26-35 characters and representing 160-bit ECDSA public key hashes of the key pair. With the advent of SegWit addresses, they became known as legacy addresses, but initially they were quite effective in presenting the bitcoin scripts in a more user-friendly way and reducing the risk of sending funds to the wrong address.A standard bitcoin address consists of the following parts
- a public key generated as a result of SHA256 and RIPEMD algorithms being applied to the private key;
3. Why is there a different number of characters in bitcoin addresses?
If zeros appear in the beginning of the result when converting a private key, they are not included in the bitcoin address in legacy format, and the bitcoin address is reduced by the corresponding number of characters. That’s why a bitcoin address can consist of not 34 but theoretically even 20 characters.
4. How are the parts of a bitcoin address encrypted?
All parts of a bitcoin legacy address are encrypted with the Base58Check encoding system. The code is based on the Latin alphabet. You will never see characters that are easily confused (plus and minus signs, slash, zero, capital letters “o” and “i”, lowercase “L”) in a bitcoin address. According to Base58Check, only the following 58 characters apply:
5. What is a P2SH bitcoin address?
P2SH addresses (Pay to script hash) appeared in bitcoin enhancement proposal BIP-0016 in January 2012 thanks to Bitcoin Foundation chief scientist Gavin Andresen. They have the same structure as legacy addresses, but start with the number 3. Such addresses assume that the recipient must have a script that matches the hash script when transferring funds. This feature allows you to reduce the sender’s bitcoin transfer fee, shift the commission cost to the recipient, and create multi-signature addresses.
P2SH technology can allow any user to use the funds or, conversely, deny them to anyone. It is important to remember that P2SH bitcoin addresses support SegWit, but are not a native solution. Cryptocurrencies that do not support SegWit can conduct SegWit transactions thanks to the P2WPKH-to-P2SH and P2WSH-to-P2SH mechanisms.
Example P2SH address:
6. What is a bitcoin address in SegWit format?
In the spring of 2016, developers Peter Welle and Greg Maxwell proposed a new address format in the BIP-0173 update: Bech32 (often also called SegWit address, P2WPKH – Pay to Witness Public Key Hash). The SegWit (Segregated Witness) protocol itself involved reducing the size of a block in the bitcoin network by removing a signature from it and was activated in late August 2017.
SegWit addresses begin with bc1 (in the test network, with tb), contain up to 90 characters (more often about 42), and are written either in upper case only (for QR codes) or lower case only (preferred).SegWit addresses consist of:
- a human-readable part,
- separator (1),
- The data and the checksum.
If up to four errors were made when entering the address, the checksum included in the Bech32 address will not add up. Thanks to the Bowes-Chowdhury-Hockwinkham code (BCH code) applied in the solution, the errors will be automatically corrected.
The following 32 characters are used when writing the Bech32 address:
Example Bech32 address:
7. What are the pros and cons of using Bech32 addresses?
With the new addresses, QR codes have become smaller and protection from error is higher. In addition, the use of bitcoin addresses in Bech32 format today is more profitable for users, because the commission for sending funds from them is lower and the speed of processing is higher. The main disadvantage of Bech32 addresses – not all cryptocurrencies and services support them.Among the first support for such addresses added hardware cryptocurrencies Ledger Nano S, TREZOR and Digital Bitbox, desktop cryptocurrencies Electrum and Armory, mobile cryptocurrencies Edge, GreenAddress (for iOS- and Android devices), as well as Samourai Wallet, Wasabi Wallet, GreenBits and Electrum (for Android devices).
8. Is it possible to transfer bitcoins from legacy address to SegWit address?
SegWit activation on the bitcoin network was a softfork – this means that the new and previous versions have maintained compatibility. That is, you can transfer funds from legacy address to SegWit address without any problems. At the blockchain level, there are no problems with the difference in address formats.In practice, difficulties arise if a user wants to transfer funds from his legacy address, for example, created on a crypto exchange, to a bc1 address, and the trading floor has not yet technically implemented support for the new address format. In that case, you should use a P2SH address, albeit less efficient than bc1-, but still more advanced than legacy-.
In the opposite direction, from bc1-address to legacy-address, the funds should come in without any problems.
9. Which block reviewers track bc1-addresses?
Keeping track of Bitcoin’s adaptation of the Bech32 format addresses is handy on a special page at Bitcoin Wiki. Today, bc1 addresses are parsed and indexed by Blockstream.info, Apirone.com, Bitaps.com, Bitupper Explorer, Blockchair, Blockonomics, Blockpath, BTC.com, chaindex and OXT. While Blockcypher, Insight and Tradeblock do neither, and blockchain.info does not support indexing.