Bitcoin address

A Bitcoin address is the human-readable representation of a scriptPubKey: the node does not understand addresses, the wallet translates between address and script. It is derived from the public key or from a script, never the other way around, and the private key never appears in it. Four formats are in active use. P2PKH (legacy, starts with 1) and P2SH (starts with 3) use Base58Check encoding over a HASH160 (SHA-256 then RIPEMD-160). Bech32 (native SegWit v0, bc1q) and Bech32m (Taproot v1, bc1p) use base32 encoding with a more robust checksum. Each format maps to a specific script type.

For anyone integrating payments, distinguishing formats is a requirement, not a detail. A gateway that only supports 1 or 3 cannot receive from modern wallets, and the user loses the payment or the funds. The checksum prevents losses: Bitcoin has no undo, and a well-formed but wrong address makes funds unrecoverable. Format also affects fees, because SegWit and Taproot addresses produce cheaper transactions thanks to the witness weight discount.

The milestones are dated. SegWit (BIP141) activated on 24 August 2017 at block 481,824, enabling Bech32 (BIP173). Taproot (BIP340 to BIP342) activated on 14 November 2021 at block 709,632, with Bech32m addresses (BIP350). Satoshi's genesis block address, 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa, is the canonical example of the 1 format.