Segregated Witness (SegWit) is a change in Bitcoin transactions that separates transaction signatures and scripts (witness data) from inputs and outputs data. Its goal is to solve non-intentional transaction malleability and pave the way for Layer 2 Bitcoin scaling.
This allows for more Segwit transactions to fit in a Bitcoin block, increasing throughput and lowering fees for users in the network.
SegWit is accompanied by the Bech32 address standard. Bech32 addresses, also known as ‘native SegWit’ addresses, all begin with the characters “bc1,” whereas Legacy addresses begin with a "1." For example:
- Bech32: bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq
- Legacy: 157fRrqAKrDyGHr1Bx3yDxeMv8Rh45aUet
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.
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!