Original Topic: Why people should be using SegWit addressesAuthor:1miau
Four years ago, the SegWit (
https://en.bitcoinwiki.org/wiki/Segregated_Witness) don dey and one of the koko benefits be say the transaction fees go reduce, transactions wey dey come from SegWit addresses dey attract lower fees.
The Bitcoin addresses get many different formats. If you look at the beginning of the address, you go see the prefix. This fit show you the kind of address wey e be.
| Prefix | Category | Format |
| ________ | __________________________ | _______________________________________________________________________________ _____________________ |
| 1
| Legacy-Address | P2PKH (pay to public key hash) |
| 3
| Multisignature-Address | P2SH (pay to script hash) |
| ________ | __________________________ | _______________________________________________________________________________ _____________________ |
| 3
| nested SegWit-Address | P2WPKH-P2SH (pay to witness public key hash - pay to script hash) P2WSH-P2SH (pay to witness script hash - pay to script hash) |
| ________ | __________________________ | _______________________________________________________________________________ _____________________ |
| bc1q
| native SegWit-Address (bech32) | P2WPKH-bech32 (pay to witness public key hash) P2WSH-bech32 (pay to witness script hash) |
| bc1p
| Taproot-Address | P2TR-bech32m (pay to tap root) |
1... the addresses wey dey start with 1 na the regular standard Bitcoin address. The addresses wey get dis prefix
no be SegWit.
3... If address start with 3, e
fit be either SegWit or multisignature address. The only way to know whether na SegWit address or multisignature address na to check the details of the outgoing transaction.
bc1... The addresses wey start with bc1q na di native SegWit addresses. The ones wey start with bc1p na the Taproot addresses... The addresses na
always SegWit.
A simple explanation about how to know whether address na SegWit address, you fit check here:
BTC addresses starting with "3" what are they ? simplified explanation.
Native SegWit or nested SegWit? After reading wetin dey above, e go make you know wetin be the benefits of using SegWit addresses, but you fit still dey ask wetin dey different between native SegWit address (bech32, starts with bc1q...) Taproot Address (bech32m, starts with bc1p) and nested SegWit address (P2WPKH-P2SH P2WSH-P2SH, starts with 3....). For us, e dey important make we know say using native SegWit address or Taproot address go give us even lower fees pass using nested SegWit address.
Sending from nested SegWit address (3...) compared to normal legacy address (1...) go dey 26% or more cheaper. Sending from native SegWit address (bc1q...) compared to normal legacy address (1...) go dey 38% or more cheaper. The exact amount of percentage wey you go save depend on how many inputs the address get, so if the address get many inputs, you fit save more.
In November 2022 we get new type of address wey dem call Taproot-Address (bc1p...). E dey the same level with native SegWit address (bc1q...) when we talk about fee savings. If you dey use Taproot-Address send, the fee go be around 38% or more cheaper pass if you dey use normal legacy address (1...). You fit see exact details about savings wey Taproot go bring by visiting
here, provided by Charles-Tim.
One of the main reasons why native SegWit and Taproot dey similar na because dem both come from the same Witness Programm (bech32 bech32m).
Wetin be additional advantages for using SegWit address? In addition to the lower transaction fees wey you go get for your own transactions, you go also help the Bitcoin network when you use SegWit address because more transactions go fit into one block so, the Bitcoin network go fit process more transactions per second, and dis go benefit every participant.
Any disadvantage dey? If you don use Bitcoin for some centralized services, and you wan send am to your own bech32 SegWit address, dem fit reject am as invalid because some of the websites wey dey centralized never update. Dem no go fit recognize this new bech32 address format. However, this one only apply to bech32 addresses, but not nested SegWit address. Nested SegWit address dey compatible for everywhere. Most of the services dey go eventually fully support bech32 address format. This one na just information incase you dey confused about why some centralized services dey reject (BTC) bech32 addresses. You fit see the different address formats wey different platforms and services dey support, by visiting this link:
https://en.bitcoin.it/wiki/Bech32_adoption
Stats wey dey interesting about SegWitAs with other aspects of Bitcoin, we get statistical data wey dey valuable about SegWit, like the information wey dey available for
transactionfee.info.
On top the other information, you fit find the share of Bitcoin transactions wey dey use SegWit:
https://transactionfee.info/charts/payments-spending-segwit/Currently dey around 86%.
https://transactionfee.info/charts/inputs-types-by-count/Note: the total numbers of native SegWit (bech32, purple and dark blue) no too high compared to nested SegWit (light blue and orange)
ConclusionAs a matter of fact, choosing a bech32 SegWit address go be your best option for the long term. The advantages of using bech32 address dey important. The biggest advantage na say the fees dey lower, and e go also make the Bitcoin network dey more efficient.
