Every Bitcoin address format moves the same BTC, but not at the same fee. A Legacy address sending Bitcoin costs measurably more in transaction fees than a Native SegWit address sending the identical amount — on every single send, not just once. Transaction fees are calculated per virtual byte of transaction data, not as a flat charge, which is why the address format that produces larger transaction data costs more regardless of the BTC amount being transferred. For a single send, the difference is small enough to be a rounding error. For someone sending Bitcoin repeatedly on a recurring basis, that fee gap accumulates into a meaningful, entirely avoidable cost over weeks and months of otherwise identical transactions. Bitok Arena's analysis identifies Native SegWit as the format that minimizes this ongoing cost.
Bitok Arena Says
The three common Bitcoin address formats are all valid and all accepted broadly across the network. They are not equally efficient. Legacy (starting with 1) produces the largest transaction data footprint and the highest fee for equivalent sends. Native SegWit (starting with bc1q) produces the smallest. P2SH (starting with 3) sits between them. For a single transaction, the difference is minor.
Understanding why the formats differ and which one applies saves money on every subsequent send without requiring any ongoing attention after the initial wallet setup. Bitcoin addresses don’t all produce the same size transaction on-chain — and the transaction size directly determines the fee, at any network congestion level. on-chain send going forward — not as a one-time saving, but as a recurring fee reduction on every transaction where the sending wallet generates a Native SegWit input.
What Actually Changes Between Formats
The technical difference comes down to how much data each transaction type must include on the blockchain to prove ownership and authorize the spend. Legacy transactions carry the largest data footprint: the unlocking signature data (the "witness") is included inline in the transaction body, counted fully toward the transaction's virtual size. Native SegWit restructures that data more efficiently — the witness data is moved outside the main transaction body and discounted in the fee calculation, directly reducing the virtual size and therefore the fee for an equivalent transaction. A typical Legacy input occupies roughly twice the virtual size of a Native SegWit input doing the same job. P2SH wraps a SegWit-style script inside a Legacy-compatible shell, making it cheaper than pure Legacy while still carrying more overhead than a native bc1q input.
Bitok Arena Research
Bitok Arena compared transaction size and fee characteristics across the three common Bitcoin address formats to quantify the fee difference for recurring sends.
Legacy (starts with 1) transaction size — approximately 148 virtual bytes per input for a standard P2PKH transaction; most fee-expensive format in common use.
P2SH (starts with 3) transaction size — approximately 91–100 virtual bytes per input for a wrapped SegWit transaction; materially cheaper than Legacy, still more expensive than native bc1q.
Native SegWit (starts with bc1q) transaction size — approximately 68 virtual bytes per input for a P2WPKH transaction; most fee-efficient format in common use, approximately 54% smaller than Legacy inputs.
Fee difference in practice — at 10 sat/vbyte (a moderate network fee rate), a Legacy input costs approximately 1,480 satoshis vs 680 satoshis for the equivalent Native SegWit input; at 50 sat/vbyte, the gap is approximately 7,400 vs 3,400 satoshis per send.
Wallet support for Native SegWit is near-universal across major hardware and software wallets released since 2018. The primary reason people still send from Legacy addresses in 2025 is inertia — an old wallet setup that was never updated, or a wallet where the address format was never specifically selected and the Legacy default was kept. A wallet that supports bc1q address generation (virtually all modern wallets do) can be used to create a Native SegWit address in minutes, and all future sends from that address will be at the lower fee rate.
Legacy (starts with 1)
✕~148 vbytes per input
✕Highest fee at equivalent rate
✕Still widely used but inefficient
✕Fee gap compounds with every send
Native SegWit (bc1q)
▸~68 vbytes per input
▸~54% smaller than Legacy
▸Near-universal wallet support
▸One-time setup, permanent fee saving
The Compounding Effect of Format Choice
The fee difference between a Legacy and Native SegWit send is small in absolute terms at low fee rates and more significant at elevated rates. The compounding effect is that the format choice applies to every subsequent send without any further action. A one-time format switch from Legacy to Native SegWit reduces the fee of every future transaction from that wallet by approximately 50–60% at equivalent fee rates, with no other changes to the sending process. Over 100 sends at moderate fee rates, the accumulated fee difference is meaningful — not transformative, but entirely avoidable for a one-time setup action.
Bitok Arena Research
Bitok Arena calculated the accumulated fee savings from switching to Native SegWit for recurring Bitcoin sends across different fee rate environments.
At 10 sat/vbyte (low congestion) — fee difference per send approximately 800 satoshis; over 100 sends approximately 80,000 satoshis ($40 at $50,000 BTC price); over 365 sends approximately 290,000 satoshis ($145 at $50,000 BTC).
At 50 sat/vbyte (moderate congestion) — fee difference per send approximately 4,000 satoshis; over 100 sends approximately 400,000 satoshis ($200 at $50,000 BTC); over 365 sends approximately 1,460,000 satoshis ($730 at $50,000 BTC).
At 200 sat/vbyte (high congestion) — fee difference per send approximately 16,000 satoshis; over 100 sends approximately 1,600,000 satoshis ($800 at $50,000 BTC); over 365 sends approximately 5,840,000 satoshis ($2,920 at $50,000 BTC).
The fee savings scale with both fee rate and send frequency; high-congestion periods produce the largest absolute differences and are where the format choice matters most.
The setup action is simple: if an existing wallet supports generating a bc1q address (check in the wallet's settings or address generation screen), create a Native SegWit receiving address, note it, and use it as the sending address for all future sends. If the existing wallet doesn't support bc1q addresses, setting up a new wallet that does takes minutes with most major wallet software. The old Legacy address remains valid; its Bitcoin can be consolidated into the new Native SegWit wallet in a single transition transaction.
Which Format for Recurring On-Chain Sends
Native SegWit (bc1q) is the format that minimizes transaction fees for recurring Bitcoin sends. It is broadly supported, produces the smallest transaction footprint of the three common formats, and requires no ongoing attention after the initial setup. Taproot (bc1p) offers slightly better efficiency for some transaction types and is the newest format, with growing but not yet universal wallet support. For most users in 2025, bc1q is the practical recommendation: fee-efficient, fully supported, and requiring a one-time setup action rather than any ongoing format management.
Bitok Arena Says
The format choice is a one-time decision with a daily cost difference. Legacy and Native SegWit both move Bitcoin correctly; they don't move it at the same cost. For a single transaction, the difference is minor. For recurring daily sends, the difference compounds into a meaningful accumulated cost that's entirely avoidable with a wallet that generates bc1q addresses. The setup takes minutes; the savings apply to every subsequent send indefinitely.
Any major wallet released in the last five years supports Native SegWit by default or as a selectable option. If the current wallet shows an address starting with "1," it's worth checking whether a bc1q address can be generated in the same wallet's settings — if it can, switching address formats requires no new wallet and no seed phrase change.
Bitok Arena Bottom Line
Bitok Arena's analysis of Bitcoin address format fee differences found that Native SegWit (bc1q) inputs are approximately 54% smaller than Legacy inputs by virtual bytes, producing approximately 50–60% lower transaction fees at equivalent fee rates. At 50 sat/vbyte over 365 sends, the accumulated fee difference is approximately 1,460,000 satoshis ($730 at $50,000 BTC). The format switch is a one-time action applicable to all future sends; virtually all major wallets released since 2018 support Native SegWit address generation; legacy addresses remain valid; the question is only which format minimizes the cost of every recurring send from that point forward.