💡 I have pondered this question for a long time:

Why does a larger transaction occupy less virtual space in a block and consequently cost less than a smaller transaction? This can be explained through various Bitcoin address formats and their associated standards.

**Legacy (P2PKH):**

- Addresses start with "1."

- Utilizes the Pay-to-Public-Key-Hash (P2PKH) script standard.

- Includes additional features for user experience and error prevention.

- Higher transaction fees due to longer addresses.

**Wrapped-Segwit (P2SH-P2WPKH):**

- Addresses start with "3."

- An interim standard for compatibility with older wallets.

- Reduces transaction size compared to Legacy but not as efficiently as Native-Segwit.

- Slightly lower fees than Legacy.

**Native-Segwit (P2WPKH):**

- Addresses start with "bc1q."

- Utilizes the Segregated Witness (Segwit) update for lower transaction fees.

- More efficient use of storage by offloading data.

- Recommended for lower fees and good support.

**Taproot (P2TR):**

- Addresses start with "bc1p."

- Introduction of Taproot addresses with the Taproot update in November 2021.

- Offers advantages such as improved performance, privacy, and predictable fees.

- Limited support currently but could be more attractive in the future.

Overall, Native-Segwit currently appears to be the best choice for lower transaction fees, while Taproot could be considered a future standard. The differences in address formats and script standards directly impact the size of transactions in a block and, consequently, the associated costs.

Additionally, it's essential to note that a transaction can still be large even if it contains numerous inputs from different addresses. The cumulative effect of multiple inputs, especially from various sources, contributes to the overall size and complexity of a block.