BIP84 refers to a Bitcoin Improvement Proposal that outlines a specific method of generating cryptocurrency addresses known as bech32 addresses. These addresses are different from the traditional addresses starting with a 1 or 3, as they start with “bc1” and offer several benefits such as increased error detection and more efficient use of QR codes.

One key advantage of BIP84 is that it helps reduce the potential for human error when inputting addresses, as the format is more resistant to mistakes. This can help prevent users from losing funds by sending them to the wrong address.

Additionally, bech32 addresses are more space-efficient, allowing for lower transaction fees in certain situations. This can be particularly beneficial during times of network congestion when fees are high.

Overall, BIP84 and bech32 addresses offer a more user-friendly and efficient way to interact with cryptocurrencies like Bitcoin. They represent an important step forward in the ongoing development and improvement of the cryptocurrency ecosystem.