Lower Transaction Fees with SegWit

One of the benefits of SegWit is that it allows for lower transaction fees when sending bitcoin. This is because the transaction fee is based on the fee rate and the size (in bytes, not monetary value) of the transaction, and SegWit reduces the effective size of a transaction.

To send bitcoin from a Bech32 (native SegWit) address, it will require a lower fee than when sending an equivalent transaction from a legacy (non-segwit) address. In other words, to benefit from the lower fees enabled by SegWit, you must send bitcoin from a Bech32 address.

This is why the Blockchain.com Wallet now defaults to SegWit (Bech32) receiving addresses. By receiving bitcoin to SegWit addresses, you will enjoy lower fees whenever you later send this bitcoin. If you need to receive a transaction to a legacy address, please see this article for step-by-step instructions.

Bitcoin that you have previously received to Legacy addresses in your wallet will remain on the Legacy addresses until you send it. This is because moving this bitcoin to a Bech32 address would require on-chain transactions and, thus, transaction fees. It would not be practical or cost effective to do this.

However, to help you benefit from SegWit’s lower transaction fees, any change from transactions sent from Legacy addresses will automatically be sent to a SegWit change address. As a result, your bitcoin Private Key Wallet balance will migrate to SegWit addresses over time as you send transactions and the change is received to the SegWit address, and as you receive new transactions to SegWit addresses.

You can learn more about SegWit here.

Don't worry if you don't see SegWit in your Wallet yet. We're gradually rolling it out to all of our users. So, keep an eye on your Wallet and you will see SegWit soon!

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