The Bitcoin network is constantly developing and progressing. We are seeing a trend toward a new Bitcoin address format called BECH32 (pronounced “besh thirty two”). These addresses begin with the characters “bc1’ rather than “1” or “3” like other Bitcoin addresses.
At LocalCoinSwap, we are proud to be at the forefront of new technologies, and unlike the other major P2P exchanges in this space, we now offer full support for BECH32 addresses.
The LocalCoinSwap platform now supports:
- Withdrawals of Bitcoin to bech32 addresses
- Deposits of Bitcoin from bech32 addresses
There are 3 different address formats:
- P2PKH (Legacy) - starting with "1"
- P2SH - starting with "3"
- Bech32 - starting with "bc1"
BECH32 addresses offer some benefits over legacy address formats:
- They are cheaper to spend from (to send funds from).
- They are less susceptible to typos as they only contain lowercase characters
- They exist only on the Bitcoin network (not on BCH, BSV, BTG, etc.) so there is no chance of a cross-chain mixup
- Segwit and BECH32 allow an increase in block capacity without the need for a hard fork to increase the block size
- It addresses transaction malleability - https://www.coindesk.com/bitcoin-bug-guide-transaction-malleability
As Bech32 is a recently new addition to Bitcoin, there is just over 2% of BTC currently stored on this type of address. Some interesting stats about this can be seen here:
Charts from: https://p2sh.info/dashboard/db/bech32-statistics?orgId=1
As you can see BECH32 is growing in popularity and it is exciting to see improvements to the Bitcoin network being steadily adopted.
After the upcoming launch of non-custodial BTC trading, users will benefit from full BECH32 support to allow them to generate BECH32 addresses, and trade directly from hardware wallets with BECH32 addresses. This will allow users to fully benefit from the cheaper transaction costs!
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