Bech32 is a specific address format used for Bitcoin transactions. It was introduced to improve the usability of Bitcoin addresses, particularly for Segregated Witness (SegWit). Addresses in Bech32 format start with “bc1” and are designed to be more user-friendly.

They avoid the use of similar-looking characters, reducing the chances of errors when manually entering addresses. This makes transactions safer and more accessible for users. Moreover, Bech32 offers benefits such as lower transaction fees and increased speed due to reduced data size. It also supports backward compatibility, allowing users with different address formats to interact seamlessly.

The format uses a checksum to help detect errors, adding an extra layer of security. Bech32 addresses are growing in popularity with wallets and exchanges, leading to a more efficient transaction process. Overall, Bech32 enhances the overall experience and efficiency of sending and receiving Bitcoin.