What are the differences between legacy bitcoin addresses and segwit addresses?

1 answers

• Sumit sharmaOct 08, 2024 · 9 months ago
  Legacy bitcoin addresses and segwit addresses have some important differences that impact transactions and security. Legacy addresses, which start with a '1', are the original addresses used in Bitcoin. Segwit addresses, which start with a '3', are an upgraded version that provide several benefits. One key difference is how they handle transaction data. Legacy addresses include all transaction data, including the signature, in the main part of the transaction. This can result in larger transaction sizes and higher fees. Segwit addresses, on the other hand, separate the signature data from the transaction data, resulting in smaller transaction sizes and lower fees. In terms of security, segwit addresses offer improvements. The separation of signature data makes it more difficult for attackers to modify the transaction data without invalidating the signature. This reduces the risk of certain types of attacks, such as transaction malleability. Overall, segwit addresses provide a more efficient and secure way to transact in Bitcoin. However, it's worth noting that not all wallets and exchanges support segwit addresses yet. It's always recommended to check with your wallet or exchange provider to ensure compatibility before using segwit addresses.
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