Bitcoin network address types

Legacy

The Legacy address, the original BTC address format, begins with the number "1", such as 1B8NRn6cVCrS3CDM9ALKg1yoMbbGrTYXZp. Keep in mind that Legacy addresses are case-sensitive; correct capitalization matters to avoid losing funds.

Legacy addresses have larger sizes, increasing transaction sizes between them. This can lower transaction priority for miners and reduce blockchain efficiency. Furthermore, Legacy transactions typically incur higher fees because network fees depend on transaction weight, including data size, not just the Bitcoin amount.

To create Legacy addresses, the Bitcoin protocol uses the Base58 algorithm. It converts public keys into a readable format, similar to Base64 but with a shorter character set. Certain characters like 0 (zero), +, -, /, O (uppercase "o"), I (uppercase "i"), and l (lowercase "L") are excluded from P2PKH addresses to enhance security, preventing homographic attacks exploiting similar-looking characters.

Nested SegWit

In 2012, to address the issue of expensive transactions, Gavin Andresen, the Chief Scientist of the Bitcoin Foundation, proposed an improvement to BIP-0016. The proposal aimed to enhance the transaction execution logic by allowing transactions not only to be sent to addresses but also to programmable keys (scripts) - similar to smart contracts in the Ethereum blockchain. The proposal received community support, and as a result of a soft fork, a new type of Bitcoin address format was introduced, starting with the number "3," while maintaining a structure similar to Legacy addresses.

The script embedded in a public Bitcoin wallet address enables seamless transactions between addresses of different formats. For Legacy SegWit users, it also provides savings on network fees, as the new format reduced the transaction size by almost 20% by simplifying the signature verification process. Due to this compatibility, P2SH addresses are sometimes referred to as Compatible addresses.

The new format allowed the sending of transactions of any complexity, including those with multisignature (Multisig), to any address.

Multisig wallets can "split" the private key of an address into multiple keys (often 3) to enhance security. Each of these keys possesses the authority to sign a transaction, meaning they must agree (sign) the transaction together or by two out of three, depending on the multisignature setting, to send such a transaction. Large exchanges and cryptocurrency platforms primarily use these addresses.

Native SegWit

In March 2016, developers Gregory Maxwell and Peter Wuille proposed an improvement to BIP-0143, which involved the activation of the Segregated Witness protocol and introduced a new Bitcoin address format called Bech32 or SegWit address.

The Segregated Witness (SegWit) protocol aimed to separate the cryptographic signature from the transaction and move it outside the main blockchain for individual processing. This means that alongside the main chain, a secondary chain consisting solely of signatures is created.

The proposal received community support, and on August 24, 2017, a soft fork was implemented in Bitcoin. With the implementation of SegWit, transactions became much lighter, allowing for a higher number of transactions to fit into a block. SegWit increased the blockchain's throughput, and the issue of high fees was naturally resolved as the amount of transmitted data in transactions decreased by nearly 60-70%.

Moreover, the update brought several other significant advantages to Bitcoin:

1. Addresses became case-insensitive, allowing them to be written in both uppercase and lowercase. For example, the sender's address bc1qyllxgya3nuss is identical to BC1QYllXGYa3nuss or even BC1YQLLXGYA3NUSS.
2. SegWit enabled the implementation of innovative solutions such as layer 2 protocols and smart contracts.

Currently, Native SegWit addresses are the most common and widely used in the Bitcoin blockchain, accounting for over 65% of all addresses in different formats.

Taproot

Taproot is an upgrade for Bitcoin that was activated in the network on November 14, 2021, at block #709632, alongside an update called "Schnorr Scheme." The goal of this comprehensive soft fork is to enhance the network's privacy, scalability, and security.

In addition to the primary objective of addressing the blockchain trilemma, the Taproot upgrade introduced several innovations:

1. Support for NFTs (BRC-20) and smart contracts.
2. Reduction in network fees through the joint verification of multiple complex transactions, resulting in decreased data transmission.
3. The new address format is similar to Native SegWit, with the distinction of starting with "bc1p."

Taproot wallet addresses are fully compatible with other formats, allowing for seamless sending and receiving of BTC between Taproot addresses, Legacy addresses, Legacy SegWit addresses, and Native SegWit addresses. Utilizing Taproot makes transactions lighter (and therefore less costly), faster (more can fit into a block), and more confidential (not to be confused with privacy).

Bitcoin Wallets

Unisat Wallet

Website|Twitter|Discord

Unisat Wallet - the first open-source browser extension wallet for Bitcoin NFTs, Ordinals and BRC-20 tokens.

Install the Unisat wallet on your device (currently only on PC).

1. Come up with a password that you will use to log into the wallet.
2. Save the Secret Recovery Phrase.
3. In the field for selecting the type of your Bitcoin address, choose Taproot.

Now we can proceed to wallet funding, NFT minting, and operations on NFT marketplaces.

Xverse Wallet

Website|Twitter|Discord

The Xverse Wallet is a powerful tool for Bitcoin enthusiasts, allowing users to take advantage of the advanced capabilities provided by the Bitcoin Stacks layer. It is considered an advanced Bitcoin wallet, built for everyone, available for Chrome on the desktop and for iOS and Android. Xverse supports buying, selling, and trading NFT Bitcoin Ordinals and BRC-20 tokens.

Stacks is a new layer for Bitcoin that enables the deployment of smart contracts, thereby bringing DeFi and NFT capabilities to the Bitcoin network.

Install Xverse Wallet on your device: Google Chrome extension, iOS, Android

1. Using the secret phrase you got when you created the unisat wallet, import your address into the xverse wallet.
2. Come up with a password that you will use to log into the wallet.

Hiro Wallet

Website|Twitter|Discord

Hiro Wallet is one of the most popular open-source Bitcoin wallets, which, like the Xverse Wallet, allows users to leverage the advanced capabilities provided by the Bitcoin Stacks layer.

Install Hiro Wallet on your device.

Note: The wallet has two versions: browser and desktop. When using the desktop version, you will not be able to connect to applications, mint, buy, and sell NFTs.

1. Note: The wallet has two versions: browser and desktop. When using the desktop version, you will not be able to connect to applications, mint, buy, and sell NFTs.
2. Save the Secret Recovery Phrase.

How to fund a Bitcoin wallet?To fund your wallet, you will need an account on one of the cryptocurrency exchanges such as Binance, OKX, Bybit, Kucoin, and so on, as well as funds to purchase BTC (preferably $100 or more).

Why $100 or more? - The withdrawal fee from the exchange is approximately $6.5, the transaction fee on the Bitcoin network is around $3, and the cost of minting BRC-20 tokens will be around $15-20 per transaction due to increased network congestion during such times.

1. Purchase the required amount of BTC on any exchange.
2. Copy your address from the Unisat/Xverse wallet (Taproot).

1. In the Withdrawal section, specify the address and BTC network.
2. Send the transaction.

How to mint?In this section, all examples will be provided of collections that we do not advertise or promote in any way. They are collections created by strangers and are used solely for educational purposes for you.

Note: Once you send a transaction at the minute Ordinal, BRC-20, or SRC-20, you will not receive the asset immediately, as the transaction has to be processed in the blockchain. Currently, the wait for processing is about an hour. At peak times, the wait can be up to 5-6 hours.

How to mint an Ordinal?To mint an Ordinal NFT on Gama follow these steps:

1. Go to the minting page and click on "Mint." Connect your wallet (in this example, Unisat is used).

1. In the pop-up window, enter the address of your wallet (Native SegWit) where the Ordinal will be sent (e.g., bc1p...).
2. In the "Refund address" field, enter your wallet address or leave the field blank, in which case, the refund will be sent to the wallet you specified in the recipient address field.

1. Select the desired transaction fee level (preferably Normal/Higher).
2. Optionally, provide your email address.
3. Click on "Continue."

1. Next, copy the amount from the "Send this amount" field and send it to the address specified in the "To this address" field.
2. After that, click on "Continue" and monitor the processing of your transaction.

To mint an Ordinal NFT on Gama follow these steps:

1. Go to the website and connect your wallet.
2. Select the project you want to lend to and go to its page.
3. Click "Mint" and send the transaction.

1. Wait for the transaction to be processed.

How to mint BRC-20?To mint a BRC-20 on Unisat follow these steps:

1. In the search field, enter the ticker of the token you are interested in (please note that BRC-20 token tickers are limited to 4 characters). Once you find the desired token, click on it and then click on "Mint Directly."

1. The "Ticker" field should display the ticker of the token you want, and the "Limit" field will automatically show the maximum number of tokens that can be minted at once.
2. In the "Repeat Mint" field, you can specify how many transactions you want to send at once (for example, if the maximum number of tokens to mint per transaction is 1000, and you want to mint 10,000 tokens, you would enter 10 in the "Repeat Mint" field).

1. Click on "Next" to review the ticker, the number of tokens you want to mint, and the number of transactions. Then click "Next."

1. Enter the address of your wallet from which you will make the payment and where you want to receive the tokens. Specify the transaction fee (preferably "Normal" or "Custom"), and click on "Submit & Pay Invoice."

1. Press "Pay With Wallet" and confirm the transaction in your wallet.

To mint a BRC-20 on ordkit follow these steps:

1. Connect your Discord to the website.
2. Select the collection you are interested in for a mint and click on it.
3. Click "Mint".

1. Enter the quantity for the mint and your Taproot address.
2. Click "Submit & Pay".
3. Select the payment method via Opennode. The window that appears will show the amount to be sent and the address to which the funds should be sent.

How to mint SRC-20?At the moment, SRC-20 tokens can only be interacted with via Hiro Wallet. Yes, you can use other wallets, but the SRC-20 tokens will only appear in Hiro Wallet. So, one way or another, you have to import your address from another wallet or use Hiro Wallet directly.

To mint SRC-20 tokens, you need to familiarize yourself with the stampsrc

On the main page, we see the following information:

• —   The total number of created SRC-20 tokens.
• —   A complete list of tokens.

Columns:

• —   Icon - token icon.
• —   Tick - ticker symbol.
• —   Max - max supply.
• —   Lim - token minting limit.
• —   Mint - the number of users who have minted the token.
• —   % - the percentage of tokens minted in relation to the max supply.

Note: For some tokens in the "%" section, the value may exceed 100. This indicates that users attempted to mint the token after the entire supply was sold out, resulting in a loss of funds.

Note #2: stampsrc is not updated instantly, so if a token in the "%" column has a value close to 100, there is a high chance that you will not receive the tokens and may lose your money. If the website was last updated several hours ago, the information is not accurate, and it is highly likely that all tokens have already been minted.

To mint an SRC-20, follow these steps:

1. Go to stampsrc and select the token you are interested in. Copy the values of Tick (ticker) and Lim (limit), ensuring beforehand that the token can still be minted and that the value in the "%" column is not close to 100.

1. Go to stampchain and in the Operation field, select Mint. In the Ticker field, enter the ticker you previously copied from the Tick column. In the Amount field, enter the value you previously copied from the Lim column and in the "Your Bitcoin Address" field, enter the Bitcoin Stamp address from your Hiro Wallet.
2. Click on "Quote," then "Stamp." Next, copy the required amount specified after "Send" and send it to the address provided on the page after "Send (amount)" to bc1q...

Ordinals NFT Marketplaces

Magic Eden

Website|Twitter|Discord

One of the largest representatives of the NFT marketplace, Magic Eden was first launched as a Solana NFT marketplace. It later integrated the Ethereum and Polygon networks. On March 22, 2023, Magic announced the integration of the Bitcoin network. Total trading volume of Ordinals on Magic Eden had reached 1,220 BTC, equivalent to $34,000,000.

Ordinals Wallet

Website|Twitter|Discord

One of the first and popular NFT marketplaces for trading Ordinals and BRC-20. Total trading volume since February 2023 is ~600 BTC, equivalent to $17,000,000.

Gamma

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Website|Twitter|Discord

It is an NFT marketplace that focuses solely on Ordinals, while also providing a launchpad functionality for artists. It operates on both the BTC and Stacks networks. The total trading volume is approximately 30 BTC, equivalent to $850,000.

BRC-20 NFT Marketplaces

Unisat

Website|Twitter|Discord

The most popular BRC-20 marketplace was launched on April 23, 2023. The total trading volume is $3,400 BTC, equivalent to $95,000,000.

OKX

Website|Twitter

The well-known cryptocurrency exchange, OKX, is also adapting and integrating BRC-20 tokens into its marketplace. The total trading volume is approximately $30 BTC, equivalent to $850,000.

It is currently the only major exchange that has integrated BRC-20 tokens into its NFT marketplace.

SRC-20 NFT Marketplaces

Rarestamp

Website|Telegram

At the moment, it is the first and only SRC-20 marketplace. Due to this, the visual component leaves a lot to be desired. However, the SRC-20 token market is very young, not even two months old, so we can expect a high level of asset and mass integration in the near future.

List of Bitcoin Explorer services for tracking your transactions

1. Blockchain.com Explorer: One of the most well-known and widely used services for tracking Bitcoin transactions. It allows you to view information about blocks, transactions, addresses, and other related data.

1. Blockchair: Allows you to search and analyze data about Bitcoin blocks, transactions, and addresses. It also provides information about fees, block sizes, mempool and other statistical data.

1. BTC.com Explorer: Provides information about Bitcoin blocks, transactions, and addresses. It includes features such as address tracking and transaction search based on various parameters.

Conclusion

The market for BTC Ordinals, BRC-20, and SRC-20 tokens is still very young, and there are many aspects that need to be simplified and made more intuitive for the average user, similar to Solana.

The Bitcoin network represents a vast realm of opportunities with a large community of enthusiasts. However, due to network limitations, users have been unable to participate in DeFi and NFT activities for years. As a result, the Bitcoin network has essentially been a "locked liquidity" ecosystem. Now, we are witnessing its gradual opening up to these possibilities.

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