In this article, you will learn what is Bitcoin native SegWit. SegWit (P2SH) and Native SegWit (bech32) are not the first address formats to exist for Bitcoin accounts. The very first one was Legacy, where addresses would start with a “1”. Bitcoin native SegWit provides several benefits over legacy Bitcoin addresses, including lower transaction fees, faster transaction processing times, and increased security.
What is Bitcoin Native SegWit?
Bitcoin native SegWit, also known as Segregated Witness, is a technology upgrade that was introduced to the Bitcoin network in 2017. SegWit is a soft fork, meaning it is a backwards-compatible upgrade that does not require all nodes on the network to upgrade to the new version of the software.
The SegWit upgrade changes the way transactions are stored in the Bitcoin blockchain, allowing for more efficient use of block space and faster transaction processing times. This is achieved by separating the transaction data from the signature data, which is called "witness data." With SegWit, the witness data is moved to a separate area of the block, which allows for more transactions to be included in each block.
Bitcoin native SegWit uses a different address format than traditional Bitcoin addresses. Native SegWit addresses start with "bc1" and are shorter than legacy Bitcoin addresses, which start with a "1" or "3". Native SegWit addresses are also more secure than legacy addresses because they use a different hashing algorithm, which makes them less vulnerable to certain types of attacks.
However, not all wallets and exchanges support native SegWit addresses yet, so it is important to check if your wallet or exchange supports this address format before sending or receiving funds.
What is the Difference Between SegWit and Native SegWit?
SegWit and native SegWit are both implementations of the Segregated Witness technology upgrade in the Bitcoin network, but they differ in how they store transaction data.
SegWit, or P2SH SegWit, stands for Pay-to-Script-Hash Segregated Witness. With SegWit, the witness data is separated from the transaction data and stored in a new data structure called the witness block. The witness block is then stored in a special type of Bitcoin address that starts with a "3". This means that the transaction data itself is not actually stored in the witness block, but is instead represented by a reference to the original transaction.
Native SegWit, or bech32 SegWit, on the other hand, stores both the transaction data and the witness data in a new data structure called the witness block. This allows for even more efficient use of block space and faster transaction processing times. Native SegWit addresses start with "bc1" and are shorter than legacy addresses, making them more user-friendly.
Bottom Line
Overall, the main difference between SegWit and native SegWit is that SegWit uses a new address format and stores the witness data in a separate block, while native SegWit stores both the transaction and witness data in a single block and uses a new, more user- friendly address format. This article is about what is Bitcoin native SegWit.
