Difference Between Segwit and Legacy

What is the Difference Between SegWit and Legacy Bitcoin Addresses

Ever heard of SegWit and Legacy? They’re like two buddies, but what is the difference between SegWit and Legacy Bitcoin addresses?

Imagine you’re ready to make your first Bitcoin transfer, and suddenly, you’re asked to pick between SegWit and Legacy addresses. Sounds confusing, right? 

No worries, I’ve got your back.

In this blog post, I’ll unravel the mysteries between SegWit and Legacy Bitcoin addresses. 

By the end, you’ll not only get the basics but also be able to choose the right one for your needs.

But wait, why should you even care about this choice?

Think of it like this: picking the right address can affect how fast and how much your transactions cost. And who wouldn’t want to make their Bitcoin experience top-notch?

Join me on this little journey. I’ll keep it light and fun.

What is a Bitcoin Address?

Imagine a Bitcoin address as your online mailbox for sending or getting Bitcoins – it’s like a digital version of your real-life mailbox. 

It’s made up of letters and numbers, sort of like your own unique code. 

This special code helps you do things with your Bitcoins on the internet.

Picture it this way: just like your email address helps you get or send messages, your Bitcoin address helps you get or send bits of digital money. 

So, it’s kind of like swapping emails, but instead, you’re swapping units of online cash.

Legacy Bitcoin Addresses

Now that we’ve got a good handle on what Bitcoin addresses are, let’s dive into the OG ones, also known as Legacy addresses. 

These are like the grandparents of Bitcoin addresses, the OGs that have been around since the start.

1. Origin and Look

So, Legacy addresses, or Pay to Public Key Hash (P2PKH) addresses, are the originals in the Bitcoin world. 

They’ve been there since day one and are still hanging out today. 

You can recognize them because they usually start with a ‘1’, like this: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa.

2. How Legacy Addresses Work

Now, let’s talk about how these addresses do their thing. 

Legacy addresses work based on a hash of the receiver’s public key. 

Without diving too deep into the tech stuff, it’s like saying when someone sends you Bitcoin to your Legacy address, they’re actually sending it to the hash of your public key.

3. Downsides

Legacy addresses have been the cool cats of Bitcoin transactions, but they have their quirks. 

One biggie is their size—they’re a bit on the chunky side, which can hike up transaction fees. 

Because of size limits in Bitcoin blocks, dealing with Legacy addresses might cost you more compared to the new kids on the block, like SegWit.

But hang on, as we keep rolling, remember that even though Legacy addresses have been Bitcoin’s ride-or-die for ages, there are some new kids on the block. 

These cool alternatives, like SegWit, have popped up to tackle some of the issues we’ve seen. 

Segregated Witness (SegWit)

Let’s explore the cool world of Segregated Witness, or SegWit, and how it’s shaking things up in the realm of Bitcoin. 

This special address format was introduced to tackle some issues we had with the old-style Legacy addresses.

1. Getting to Know Segregated Witness (SegWit)

Segregated Witness, or SegWit for short, is like a fancy upgrade for Bitcoin transactions. It came into play in August 2017, changing how transaction data is structured. 

Think of it as a makeover for smoother and more efficient transactions.

2. How SegWit Addresses are Different

Unlike the old Legacy addresses, SegWit addresses, also known as Pay to Witness Public Key Hash (P2WPKH) addresses, start with a ‘bc1’. 

For example, a SegWit address could look like this: bc1qar0srrr7xfkvy5l643lydnw9re59gtzzwf5mdq.

The cool part about SegWit is that it separates the witness (the cryptographic signature data) from the transaction data. 

This means more transactions can be squeezed into a single block.

3. Benefits of SegWit

Let’s talk benefits:

  • Cheaper Transactions: Splitting the witness data lets more transactions fit into a block, which means less traffic and lower fees.
  • Increased Scalability: By organizing how data is stored in blocks, SegWit helps the Bitcoin network handle more transactions – it’s like giving it more space to breathe.
  • Fixing Transaction Malleability: SegWit addresses sort out the problem of transaction malleability, which is like fixing a potential hiccup that could mess with transactions.

4. Compatibility and Moving Forward

Good news – SegWit is backward-compatible, meaning that old wallets and services using Legacy addresses can still interact with SegWit addresses. 

This makes the transition to Segwit smooth and gradual.

5. Why Choose SegWit

If you want your Bitcoin transactions to be smoother and more cost-effective, switching to SegWit addresses is a smart move. 

Many modern wallets and services are already on board, making it easy for you to enjoy the benefits.

What is the Difference Between SegWit and Legacy

Now that we’ve dived into the basics of both Legacy and Segwit Bitcoin addresses, let’s break down the main differences between Legacy and SegWit Bitcoin addresses.

  1. How Transactions Work:
    1. Legacy Addresses: Think of it like putting the sender, receiver, and the amount all in one box. It includes something called signature data, which is like the sender’s signature, and it’s all part of the transaction size.
    2. SegWit Addresses: Now, imagine separating the sender’s signature from the other details. This makes the transaction size smaller, making it more efficient when stored on the blockchain.
  2. Block Size and Scalability:
    1. Legacy Addresses: Transactions using Legacy addresses take up more space in a block because of that signature data. This means fewer transactions can happen in a single block.
    2. SegWit Addresses: By separating the signature data, SegWit allows more transactions to fit into a block. This helps when lots of people are using Bitcoin at the same time, preventing delays.
  3. Fees and Costs:
    1. Legacy Addresses: Because Legacy transactions are bigger, they might cost more, especially when the network is busy.
    2. SegWit Addresses: Since SegWit transactions are more streamlined, they usually come with lower fees. This makes SegWit addresses a good choice if you want to save on transaction costs.
  4. Compatibility with Older Stuff:
    1. Legacy Addresses: Legacy addresses are fully compatible with older Bitcoin wallets and services.
    2. SegWit Addresses: SegWit is backward-compatible, allowing seamless interaction with Legacy addresses.
  5. Address Format:
    1. Legacy Addresses: They start with ‘1’.
    2. SegWit Addresses: Start with ‘bc1’.

Understanding these differences helps you make smarter choices based on what you need. 

Whether it’s saving on fees, helping the network handle more transactions, or just working smoothly with older systems, picking between SegWit and Legacy addresses depends on what suits you best.

Common SegWit and Legacy Questions and Concerns

Navigating Bitcoin addresses can be a bit confusing, especially when moving from Legacy to SegWit.

 If you’re feeling puzzled, don’t worry—I’ve got you covered!

Let’s simply tackle some common questions:

1. Why should I bother moving to SegWit?

  • Answer: Switching to SegWit addresses can save you money on transaction fees and make Bitcoin more scalable. If you often send or get Bitcoin, this can add up to significant savings over time.

2. Is SegWit safer than Legacy?

  • Answer: Both SegWit and Legacy addresses are secure. Your Bitcoin’s safety depends on keeping your private keys safe. SegWit addresses improve efficiency without compromising security.

Read Also: 7 Best Ways to Protect Your Crypto Against Theft and Hacking

3. Can I still get Bitcoin to my old Legacy address after moving to SegWit?

  • Answer: Absolutely! Your old Legacy address still works fine even after moving to SegWit. Any Bitcoin sent to your Legacy address will show up in your wallet.

4. What happens if I send Bitcoin from a SegWit wallet to a Legacy wallet (or the other way around)?

  • Answer: No worries! Bitcoin can be sent between SegWit and Legacy addresses without a hitch. The transaction goes through normally, and the recipient’s wallet handles the different address formats seamlessly.

5. Can I go back to using Legacy after switching to SegWit?

  • Answer: Yep, you can use both SegWit and Legacy addresses at the same time. Your wallet manages both types, giving you flexibility in your Bitcoin transactions.

By answering these common questions, we’re aiming to make the world of Bitcoin clearer for beginners. 


Understanding the difference between SegWit and Legacy Bitcoin addresses is like discovering the secret sauce of your favorite burger joint – it might not be apparent at first, but once you know, you can’t go back to plain old ketchup!

So, what’s the deal?

Legacy is like the original gangster (OG) of Bitcoin addresses. It’s the classic, been-around-since-the-start kind of deal – reliable and proven over time.

But, just like the old car, it might not have all the cool upgrades for the best performance.

Now, enter SegWit – the tech-savvy cousin who’s all about embracing innovation. SegWit stands for Segregated Witness. 

SegWit not only makes transactions faster but also helps in saving some bucks by reducing fees. Who doesn’t love a good discount?

Legacy addresses start with a ‘1’, while SegWit addresses start with ‘bc1’.

Additional Resources

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What is the Difference Between Segwit and Legacy

IMPORTANT; You must never send money to anyone you meet online asking to help you invest in cryptocurrency. They are scammers. Crypto is easy, and you can do it all by yourself.


The information provided here is intended for informational purposes only and should not be solely relied upon for making investment decisions. It does not constitute financial, tax, legal, or accounting advice. Additionally, I strongly recommend that you only invest in cryptocurrency an amount you are comfortable with potentially losing temporarily.

Read Also: Most Common Crypto Scams and How to Avoid Them

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