I just had an interesting observation about the history of Bitcoin — how this network has evolved over the years to solve performance issues that no one anticipated at the beginning.

When Bitcoin launched on January 3, 2009, everything was simple. It used the straightforward public key-private key pair, and addresses started with 1 — these were P2PKH addresses (Pay 2 PubKey Hash). Today, that’s a relic because they take up a lot of space and come with high fees. We all know them, but practically no one uses them anymore.

Problems started quickly. The block size limit of 1MB proved to be a bottleneck. In 2016, people tried to increase it — Bitcoin Classic wanted 2 MB, Bitcoin XT proposed 8 MB, but nothing came of it. A deadlock.

Until 2017, when the hard fork with the SegWit update arrived. A brilliant idea — separating digital signatures from transaction data. This allowed reducing the size of transaction information, lowering fees, and effectively increasing block capacity to 4MB. The solution was so good that some disagreed and created Bitcoin Cash.

SegWit introduced two new types of addresses. First, nested SegWit addresses (Nested SegWit) starting with 3 — a compromise for compatibility with older wallets, using BIP 49 paths. Then came native SegWit, or bech32, addresses starting with bc1. This was serious — it ignores case sensitivity, uses Base32 instead of Base58, and makes calculations more convenient. Standardized in BIP173 at the end of 2017. Today, native SegWit is the standard everyone should use.

After a few years, SegWit covered almost all active addresses. Legacy addresses? Practically eliminated.

But that’s not the end. In November 2021, Taproot arrived — a soft fork that changed the game. BIP340 introduced Schnorr signatures, allowing multiple transactions to be verified simultaneously and increasing capacity. BIP341 optimized data storage. And BIP342, Tapscript, gave Bitcoin networks real new flexibility — enabling the display of only executed scripts, hiding unspent ones, which improves privacy. Taproot addresses start with bc1p and use the BIP86 path.

And here’s where it gets interesting. Tapscript opened the door for various resources and inscriptions, which in 2024 caused a huge wave — inscriptions, ORDI, and the entire scene. Bitcoin proved it can be more than just a currency.

The BTC price now hovers around $69.5k (+2.72%), BCH is at $438.05 (+3.60%), and ORDI at $2.35 (+1.33%). Exciting times for those following the network’s evolution.

Overall, Bitcoin has always aimed for expansion and development. From P2PKH through SegWit to Taproot — each step was a response to previous problems. And each step opened new possibilities.