Highlander · April 30, 2025
Taproot Addresses 101
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Taproot Addresses 101
If you've used Bitcoin for more than a year, you've seen addresses that start with
13bc1qbc1pThis guide gives you a five-minute mental model: how to read a Bitcoin address at a glance, what each format actually does on-chain, and which one your KeepKey Vault Desktop should be using by default.
The five address formats, in one table
| Prefix | Name | Example | Introduced | Why use it |
|---|---|---|---|---|
1... | Legacy (P2PKH) | 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa | 2009 | Universal compatibility |
3... | P2SH-wrapped SegWit | 3J98t1WpEZ73CNmQviecrnyiWrnqRhWNLy | 2017 | Lower fees, broad wallet support |
bc1q... | Native SegWit (Bech32) | bc1qw508d6qejxtdg4y5r3zarvaryv9n3jc6 | 2017 | Lowest fees among "old" formats |
bc1p... | Taproot (Bech32m) | bc1p5cyxnuxmeuwuvkwfem96l9szl4c5zcqljas6jap | 2021 | Best privacy + smart-contract flexibility |
bc1pp/bc1pq... | Inscriptions/Ordinals | varies | 2023+ | Same Taproot prefix, different content |
The first character (and prefix in
bc1...Reading the prefix at a glance
- Starts with → Legacy. Oldest format. Highest on-chain footprint per transaction (and so highest fees). Some very old hardware wallets still default to this. There is no real reason to use it for new addresses today.
1 - Starts with → P2SH. Could be SegWit-wrapped, but not necessarily — it could also be a multi-sig or any other P2SH script. From the receiving side you can't tell which without looking at the script. As a default for SegWit it's about 25% smaller than Legacy.
3 - Starts with → Native SegWit (a.k.a. Bech32). Smaller still. The format Bitcoin Core has recommended since 2017. Detects typos better than Base58 thanks to its checksum.
bc1q - Starts with → Taproot (Bech32m). The 2021 upgrade. Improved privacy: a single Taproot output is indistinguishable from a single-sig output, a multi-sig output, or a complex smart contract — observers can't tell. Cheaper for complex spends.
bc1p
If your address starts with anything else, you're looking at testnet (
m2tb1qtb1pWhat changes on-chain — the practical differences
Fees
The fee you pay depends on how many bytes your transaction takes. Each address format has a different on-chain footprint per signature.
Roughly (single-input, single-output spend):
| Format | Approx. tx size | Fee at 30 sat/vB |
|---|---|---|
Legacy (1... | ~226 bytes | 6,780 sat |
P2SH-SegWit (3... | ~166 bytes | 4,980 sat |
Native SegWit (bc1q... | ~141 bytes | 4,230 sat |
Taproot (bc1p... | ~111 bytes | 3,330 sat |
Over a year of activity, the fee difference between Legacy and Taproot is real money, especially during high-fee periods.
Privacy
This is the under-discussed Taproot win. Pre-Taproot, the script type of an output is visible to anyone watching the chain. A
3...Taproot collapses this. A Taproot output spent via the "key path" (the cooperative case) looks identical to any other Taproot single-sig output — even if the output was secured by a complex script with multiple co-signers and time-locks underneath. From the chain's perspective, all happy-path Taproot spends are indistinguishable.
For a hardware-wallet user holding cold storage, that means the size of your wallet, the kind of script you're using, and the existence of multi-sig setups become significantly harder to fingerprint from on-chain analysis.
Smart-contract flexibility
Taproot also adds MAST (Merkleized Alternative Script Trees), which let scripts have multiple unlock conditions where only the one actually used gets revealed on-chain. Combined with Schnorr signatures (also part of the Taproot upgrade), this enables more compact and more private multi-sig and other contract patterns. For most users, this is invisible — but it's the foundation modern Bitcoin tooling builds on.
Which one does my KeepKey use?
A KeepKey running current firmware in Vault Desktop generates Native SegWit () addresses by default and also supports Taproot (bc1q...). You can switch between formats per-address-type when generating receive addresses.bc1p...
To see and copy a receive address:
- Open Vault Desktop and unlock the device
- Go to your Bitcoin account
- Click Receive
- The receive address is shown along with a QR code; the format depends on the address type configured for the account
Always verify the address on the device's screen before copying it to use. The desktop app could be compromised; the device cannot.
Sending to / receiving from different formats
- Anyone can send to anyone. Format compatibility is the sender's wallet's job. A modern wallet sends to all formats with no special handling.
- Receiving works the same. Your KeepKey can receive at a ,
1...,3..., orbc1q...address — pick the type when you generate the receive address.bc1p... - You don't have to consolidate. It's fine to have a mix of formats in a wallet. Vault Desktop tracks them all together.
The only caveat: very old wallets (pre-2017, or some custodial services that haven't updated) may not support sending to Bech32 or Bech32m. If a sender tells you "your address looks weird," give them a
3...Quick reference card
- → Legacy. Avoid for new addresses.
1... - → P2SH (often SegWit-wrapped). Still widely supported; use as fallback for old senders.
3... - → Native SegWit. Default for most wallets in 2026. Lower fees.
bc1q... - → Taproot. Best privacy + lowest fees. Use this if every counterparty supports it.
bc1p...
By recognizing these differences, you can choose the format that best fits your priorities — compatibility, efficiency, or privacy — and you can sanity-check that the address someone gave you is the kind of address you're expecting before you hit send.
Related
- What's inside KeepKey — the device side of Bitcoin signing
- Understanding UTXO Fees — how transaction fees actually work
- Storing Bitcoin with Multisig — multi-sig setups across address formats