BECH32

Bech32 is the character-encoding scheme behind Bitcoin's native SegWit addresses, standardized in 2017 by Bitcoin Core developers Pieter Wuille and Greg Maxwell as BIP 173. Rather than reusing the older Base58Check format from early Bitcoin addresses, it was built specifically for the pay-to-witness outputs introduced by Segregated Witness. Each address combines a human-readable prefix ("bc" for mainnet, "tb" for testnet), the digit "1" as a separator, and a data section encoding a witness version, a witness program, and an error-detecting checksum.

The witness version sets the prefix that follows. Version 0 outputs, covering ordinary pay-to-witness-public-key-hash and pay-to-witness-script-hash payments, always start with bc1q, while Taproot outputs (version 1) start with bc1p and rely on a refined checksum called Bech32m, defined separately in BIP 350 after researchers found the original checksum could miss certain errors when an address ended in the letter p.

Bech32 uses only lowercase letters and digits, dropping the characters 1, b, i, and o to avoid visual confusion, which makes addresses easier to read aloud, print, and pack into compact QR codes than mixed-case Base58 addresses. Its checksum is also stronger: instead of only flagging a typo, it can usually locate the exact character that was mistyped. Native SegWit transactions are smaller in data size too, which lowers the network fee compared with legacy formats.

Wallet and exchange support, once limited enough to make Bech32 a niche choice, is now close to universal: native SegWit addresses account for the large majority of on-chain Bitcoin transactions and are the default in most modern wallets. Taproot's Bech32m addresses are catching up as more exchanges add support, partly driven by demand from Ordinals and other inscription activity.