Bitpowr Wallet now Supports Bitcoin SegWit Addresses
Before now, Legacy addresses were the original BTC addresses, now SegWit addresses are the newer address format with lower fees.
SegWit stands for Segregated Witness, where Segregated means to separate and Witness refers to the transaction signatures involved with a specific transaction. In a nutshell, it is an improvement over the current bitcoin blockchain in that it reduces the size required to store transactions in a block.
Not all wallets support SegWit; if you use one that doesn’t, you won’t be able to send Bitcoin to a native SegWit address (starting with “bc1”). Moreover, compared to someone who utilizes a SegWit Bitcoin wallet, you will always pay more in fees. However, you can always use our Wrapped SegWit Address which solves the compatibility issues.
Why use SegWit addresses
1. Reduced transaction speed
SegWit has the potential to increase transaction speed, which helps to reduce transaction costs in the Bitcoin network because more transactions can be recorded in a single block. Prior to SegWit, transaction fees could amount to more than $30. However, SegWit has significantly reduced that cost to less than $1 per transaction.
2. Fixing transaction errors is simple.
A significant problem with Bitcoin was the possibility of tampering with transaction signatures. A transaction between two parties may become tainted and be recorded on the blockchain forever if a signature is compromised.
Segwit eliminates the signatures from the transaction data, making it impossible to change this data. Additional blockchain community innovation, such as second-layer protocols, and smart contracts has been made possible by this update.
3. Backward Compatibility
Another advantage of SegWit is that it is backward compatible, which means you can send money from a SegWit address to a Legacy address or Wrapped Segwit address.
How you can use SegWit addresses on Bitpowr
It is now possible to generate Native SegWit addresses on Bitpowr in order to send and receive money over the Bitcoin network through our Dashboard and API .
Bitpowr Dashboard
It is very simple to get started on the Bitpowr Dashboard, First thing is to set up an account.
After which you Select the type of wallet you want to use either Self custody or a custody wallet.
Then you can select New asset, only Bitcoin and Litcoin have SegWit support on Bitpowr for now
Click on view more to navigate into the Bitcoin assets
Click on the Addresses tab, then click on the New address button. As you are creating the address, confirm the address you want to use is SegWit.
SegWit address is automatically created and you can send and receive funds instantly.
Bitpowr API
To use the SegWit address through the Bitpowr API, you will need to have access to your API Keys. You can always get the API Key from the dashboard.
There are two ways to use SegWit addresses via API:
1. Generating Address: You can easily do that from the generate new address endpoint by passing addressType as segwit or wrappedsegwit to either generate a native SegWit address or wrapped SegWit addresses. This is default to legacy and for compatibility use the wrappedsegwit . You can look at the docs here.
2. Transaction Change Address: When creating transactions for Bitcoin and Litecoin, you can pass in changeAddressType as segwit or wrappedsegwit to be able to use SegWit addresses as a change address. See here.
Closing
In relation to scale, the introduction of SegWit was a significant step toward resolving many issues with Bitcoin and other blockchain networks. Blockchain networks are able to process more transactions more quickly and cheaply by combining SegWit with the second-layer protocols.
This also serves as a commitment to provide better solutions and features to help reduce transaction fees.
Check out our documentation to learn more about our wallet services and other related products. Contact sales or send an email to [email protected] to get started!
