Blockchain Address: Types, Formats, and Key Differences

AI summary

Blockchain addresses are unique cryptographic identifiers that enable secure, pseudonymous transactions on blockchain networks, serving as the foundation for user interaction and asset transfer. The article explains the main types of blockchain addresses—including public key, script hash (P2SH), Bech32 (SegWit), and vanity addresses—highlighting their formats, functions, security features, and compatibility considerations. Understanding these address types allows users to choose the best option for their needs and transact more securely within the crypto ecosystem.

Blockchain addresses are unique identifiers that enable secure, pseudonymous transactions across blockchain networks. They are the foundation of user interaction in the crypto ecosystem, allowing digital assets and data to move between participants while preserving strong security guarantees. In this guide, we break down what a blockchain address is, how it works, the main address types you will encounter, and the key differences between them. By the end, you will have a clear mental model of blockchain addresses and how to choose the right one for different use cases.

What is a blockchain address?

A blockchain address is a unique alphanumeric string that represents a destination for sending and receiving cryptocurrency. Conceptually, it works like a bank account number, but it is generated cryptographically and does not require a central authority. Blockchain addresses rely on public key cryptography:

Key pair generation

When you create a wallet, it generates a cryptographic key pair:

• Private key: A secret value known only to the owner. You use it to sign transactions and prove ownership of funds.
• Public key: Derived mathematically from the private key. You can share it openly without revealing the private key.

Address derivation

A blockchain address is typically produced by hashing the public key, sometimes with additional metadata or versioning. This extra step adds security and ensures compact, standardized formats.

Why blockchain addresses matter

Blockchain addresses serve several important purposes:

• Pseudonymity: They do not directly reveal a user’s real-world identity.
• Security: Only the holder of the corresponding private key can authorize transactions.
• Verification: Networks can validate transactions without exposing sensitive information.

It is important to note that blockchain addresses are pseudonymous, not anonymous. The public ledger permanently records all transactions tied to an address, and anyone can analyze them over time.

Types of blockchain addresses

Different blockchains and protocol upgrades have introduced multiple address formats. Each type serves a slightly different purpose.

Script Hash addresses (P2SH)

Script hash addresses, commonly known as P2SH (Pay-to-Script-Hash) in Bitcoin, use a script hash to define how funds can be spent. People widely use them for advanced transaction conditions.

Example (Bitcoin P2SH): 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy

Key characteristics

• Commonly used for multi-signature wallets
• Support complex spending conditions
• In Bitcoin, they typically start with 3

How the network generates P2SH addresses

1. Create a redeem script that defines spending rules
2. Hash the script
3. Add a version byte
4. Append a checksum
5. Encode the result using Base58

Bech32 addresses (SegWit)

Bech32 is a modern address format introduced with Bitcoin’s Segregated Witness (SegWit) upgrade. It improves efficiency, error detection, and user experience.

Example (Bitcoin Bech32): bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq

Key characteristics

• Uses Base32 encoding
• Case-insensitive (lowercase only)
• Bitcoin mainnet addresses start with bc1

How the network generates Bech32 addresses

1. Start with a public key or script hash
2. Add a witness version byte
3. Encode using Bech32, which includes: A human-readable prefix (e.g., bc), a separator (1), encoded data, and a six-character checksum.

Vanity addresses

Vanity addresses are customized addresses that include a chosen word or pattern. They are not a separate address type; instead, they are standard addresses generated repeatedly until a desired prefix appears.

Example: 1LoveBPzzD72PUXLzCkYAtGFYmK5vYNR33

Key characteristics

• Personalized and memorable
• Computationally expensive to generate
• Security depends on the correct generation

How vanity addresses are generated

1. Define a desired prefix (e.g., 1Love)
2. Generate random key pairs
3. Derive addresses and check for a match
4. Repeat until successful

Key differences between blockchain address types

Format and length

• Public key addresses: Usually 26–35 characters
• Script hash addresses: Similar length, different prefix
• Bech32 addresses: Typically 42–62 characters, lowercase only
• Vanity addresses: Follow the format of the underlying address type

Functionality

• Public key addresses are simple and widely supported
• Script hash addresses support advanced conditions
• Bech32 addresses improve efficiency and error detection
• Vanity addresses are cosmetic, not functional upgrades

Compatibility

• Older wallets may not support Bech32
• Not all blockchains support every address type
• Some basic wallets may struggle with script hash transactions

Security

• Bech32 offers strong checksum validation
• Script hash addresses enable multi-signature security
• Vanity addresses can weaken security if generated improperly

Efficiency

• Bech32 addresses reduce fees with SegWit
• Script hash addresses can reduce sender-side complexity

Common use cases

• Public key addresses: everyday transactions
• Script hash addresses: multi-signature, escrow, time locks
• Bech32 addresses: lower fees and modern wallets
• Vanity addresses: branding and public donations

Frequently Asked Questions About Blockchain Address

Are blockchain addresses the same as public keys?

No. The system derives an address from a public key by hashing and encoding it, adding an extra layer of security and improving usability.

Can I reuse the same blockchain address?

Yes, but it is not always recommended. Reusing addresses can make it easier to link transactions and reduce privacy. Many wallets automatically generate a new address for each transaction.

What happens if I send crypto to the wrong address?

In most cases, the transaction is irreversible. If the address exists and is valid, the network permanently transfers the funds. If the address is invalid, the network may reject the transaction.

Are blockchain addresses case-sensitive?

It depends on the format. Bitcoin legacy addresses are case-sensitive, while Bech32 addresses are case-insensitive and use lowercase only by design.

Do different cryptocurrencies use different address formats?

Yes. Each blockchain can define its own address formats, prefixes, and encoding schemes. Always ensure the address matches the network to which you are sending funds.

Conclusion

Blockchain addresses are a core building block of cryptocurrency systems. While they may look similar at first glance, different address types offer distinct benefits in terms of security, efficiency, compatibility, and usability. Public key addresses remain widely used and simple. Script hash addresses enable advanced features like multi-signature wallets. Bech32 addresses represent a modern, efficient standard with strong error detection. Vanity addresses add personalization without changing underlying functionality. Choosing the correct address type depends on your goals, wallet support, and the blockchain you are using. Understanding these differences helps you transact more safely and confidently in the blockchain ecosystem.