Hey everyone!
Just wanted to throw out there the four main Bitcoin address types:
1. Legacy (P2PKH) starts with a 1
2. Nested SegWit (P2SH) starts with a 3
3. Native SegWit (bech32) starts with bc1
4. Taproot (P2TR) starts with bc1p
Legacy is the old-school one, no surprise there. Taproot seems way too complicated for folks new to this.
What are the real pros and cons of using Nested SegWit vs Native SegWit? I'm really curious about how it plays out in real life, like with wallets and sending/receiving sats.
Honestly, Taproot addresses aren’t that tough for newbies. Just use a wallet that supports it!
If you're into consolidating inputs after DCAing, Taproot's your best bet for low fees. But if you have a bunch of outputs, like paying salaries, SegWit version 0 (bc1q) is the way to go.
In simple terms, lower fees are what I'm talking about.
Just a heads up, not every address starting with 3 is SegWit.
Those addresses can be P2SH which includes multi-signature, time-locked, and more. If you use nested SegWit instead of legacy, you could potentially cut fees by around 38%. But native SegWit can drop fees by about 53%. Pretty wild, right?
Both SegWit types help lower transaction fees.
Nested SegWit (P2SH) is good for multi-sig wallets and can reduce fees by about 26%. It's compatible with new and old software, but not all software verifies it correctly.
Native SegWit is more popular and slashes fees by almost 52%. The downside? It doesn’t work with older wallets.
Quick point P2SH isn’t always SegWit. It depends on the script!
You can have multi-sig or time-locked addresses under that category. Just remember, fee reduction can vary based on the number of inputs and outputs.
Honestly, you’re probably better off skipping Nested SegWit nowadays.
Its main goal was to help with SegWit adoption without breaking compatibility, but that’s less of a concern now. Native SegWit is the way to go for lower fees. Most services support bc1q addresses these days.
Native SegWit starts with bc1q. For on-chain transactions, it’s just like any other address type nothing complicated.
If you’re not tied to exchanges, no need for Nested SegWit. Some wallets like Electrum now only generate Native SegWit by default.
Just to clarify, Nested SegWit isn’t the same as Legacy.
But you seem to be aware of that. I’ve been using Electrum and haven’t seen an option for Nested SegWit just Legacy or Native SegWit.
Exactly. Fee reduction varies with inputs/outputs. But native SegWit is always cheaper than Nested SegWit.
If you want to save on fees, go for Taproot or Native SegWit.
Electrum hasn’t removed the option for Legacy wallets, if I remember correctly.
You can still create a Legacy wallet, but it’s not the default setting anymore.
On both mobile and desktop Electrum, you used to be able to generate either Legacy or Native SegWit wallets.
Now, you might need to use the console for Legacy seed phrases. Typing a specific command can generate a 12-word Legacy seed.