Types of Bitcoin Explained: Forks, Wrapped BTC, Address Types and Units
Learn the different types of Bitcoin: BTC vs forks like Bitcoin Cash, wrapped bitcoin, Lightning, address formats (Legacy, SegWit, Taproot) and satoshis.
Ask ten people about the "types of bitcoin" and you may get ten different answers. Some mean coins with "Bitcoin" in their name, some mean wallet address formats, and others mean products such as wrapped bitcoin or bitcoin ETFs. This guide sorts them into clear groups so you know exactly what you are buying, sending or holding.
1. The original: Bitcoin (BTC)
Bitcoin (BTC) is the first cryptocurrency, launched in 2009. It runs on its own blockchain secured by proof-of-work mining and has a fixed maximum supply of 21 million coins. When people say "bitcoin" without qualification, this is what they mean — and it is the coin quoted when you see the price of "1 bitcoin".
New to the basics? Start with our beginner's guide to cryptocurrency and how blockchain works.
2. Bitcoin forks: different coins with similar names
A hard fork happens when part of the community changes the rules and splits off into a separate blockchain. The result is a new, independent coin with its own price.
| Coin | Ticker | Created | Main difference |
|---|---|---|---|
| Bitcoin Cash | BCH | 2017 | Larger blocks to allow more transactions on-chain |
| Bitcoin SV | BSV | 2018 (split from BCH) | Even larger blocks; aims to follow a specific reading of the original design |
| Bitcoin Gold | BTG | 2017 | Changed the mining algorithm to favour graphics cards |
Watch out: Forked coins are not interchangeable with BTC. Sending BTC to a Bitcoin Cash address (or the reverse) on the wrong network can result in lost funds. Always double-check the network your exchange or wallet shows.
3. Wrapped and bridged bitcoin
Bitcoin's blockchain doesn't natively support the same smart contracts as Ethereum. To use BTC in decentralised finance (DeFi), projects create wrapped bitcoin: a token on another chain that is meant to be backed 1:1 by real BTC held by a custodian or a smart-contract system.
- Examples: WBTC on Ethereum and various other wrapped or bridged BTC tokens on other networks.
- The trade-off: You gain access to apps on other chains, but you rely on the custodian or bridge. If it fails or is hacked, the wrapped token may lose its backing.
Moving wrapped tokens costs network fees on that chain — see what gas fees are.
4. Bitcoin on the Lightning Network
The Lightning Network is a "layer-2" system built on top of Bitcoin. It lets users open payment channels and send small amounts of BTC almost instantly with very low fees. It is still real BTC, just moved off the main chain for speed. Many tipping apps and some reward platforms pay out in Lightning sats.
5. Bitcoin address types
Inside the Bitcoin network itself there are several address formats. They all hold the same BTC, but they differ in fees and compatibility.
| Address type | Starts with | Notes |
|---|---|---|
| Legacy (P2PKH) | 1… | The original format; widely supported but usually higher fees |
| Nested SegWit (P2SH) | 3… | A compatibility format that brought lower fees to older software |
| Native SegWit (Bech32) | bc1q… | Lower fees and fewer typing errors; the common default today |
| Taproot (Bech32m) | bc1p… | Activated in 2021; improves privacy and efficiency for complex transactions |
Tip: Modern wallets and exchanges can send between all of these formats. The address type matters most for fees and for older services that may not recognise newer formats.
6. Units: bitcoin and satoshis
You don't need to buy a whole coin. Bitcoin divides into 100,000,000 units called satoshis (sats). So 0.001 BTC equals 100,000 sats. Many apps now display small balances in sats because it is easier to read than long decimals.
7. Ways to get bitcoin exposure without holding BTC directly
- Spot bitcoin ETFs: Since January 2024, U.S. investors can buy exchange-traded funds that hold BTC through an ordinary brokerage account. You own fund shares, not coins you can send.
- Exchange balances: BTC held on an exchange is held by that company for you. Compare that with self-custody in our hot vs cold wallet guide.
- Derivatives: Futures and options track the price of BTC but carry leverage risk and are not suitable for most beginners.
Frequently asked questions
Which type of bitcoin is the "real" one?
The coin with the ticker BTC on the original chain is what almost everyone means by Bitcoin. Forks such as BCH and BSV are separate cryptocurrencies.
Is wrapped bitcoin the same as bitcoin?
It is designed to track BTC's price, but it is a token on a different blockchain that depends on a custodian or bridge. It carries extra risks that native BTC doesn't.
Which bitcoin address type should I use?
Most people are fine with their wallet's default, which is usually Native SegWit (bc1q…) or Taproot (bc1p…). Just make sure the service you send from supports it.
Key takeaway
"Types of bitcoin" covers four different ideas: the original BTC, forked coins with similar names, wrapped or layer-2 versions of BTC, and wallet address formats. Knowing which one you are dealing with protects you from sending funds to the wrong network and from buying a coin you didn't intend to.
Educational content only. This article is for general information and is not financial, investment, tax or legal advice. Crypto assets are highly volatile and you can lose money. Always do your own research and never share your seed phrase or private keys. Read our full disclaimer.
