What are Native Segwit Addresses?

Teju Updated by Teju

After our scheduled upgrade, we switched all our Bitcoin and Litecoin wallet addresses to Native SegWit addresses. Here's what you need to know about them:

What does Native SegWit mean?

"segregated" refers to separation and "witness" refers to the signatures involved with a transaction. As such, SegWit is the separation of signature data from a transaction in order to reduce its size.

Native Segwit is the latest upgrade to the bitcoin network, and its addresses start with "bc1..." as shown below. Native SegWit addresses for Litecoin begin with the letter "M".

How is Native SegWit better?

By reducing the size of transactions, more transactions can fit into a single block. This means that the network can process more transactions at once (increased speed), charge lower fees per transaction and be more scalable.

Native Segwit also provides increased security. By separating the main part of the transaction data from the part which authorizes the transaction (witness/signature), transactions become more secure.

Another main benefit of SegWit addresses is that they are backwards compatible, meaning that you can send funds from a Bitcoin Native SegWit address to a Legacy Bitcoin address.

How will this affect me?

As a result of the upgrade, addresses that were generated before August 1, 2020, are now invalid. To avoid coin loss, ensure that you use a new address when receiving coins.  Here is a step-by-step guide on how to generate a wallet address.

While Native SegWit addresses offer a lot of benefits, not all wallets, exchanges and services support sending to them yet. You might notice that when you try sending coins to your Buycoins wallet from some platforms, you get an "invalid address" error, this means that they don't yet support SegWit addresses.

As a workaround, you may try sending coins to another wallet such as Trust Wallet or Coinbase Wallet first and then sending it to your SegWit is a short form of Segregated Witness were Buycoins wallet from there.

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