Bitcoin Legacy vs. SegWit wallet address. What is the difference?

Siddharth Menon ( WazirX founder)
2 min readFeb 24, 2018


I am trying to help all those confused about this topic. If you are into bitcoin for the tech or want to genuinely understand how it works, then this is all you need. I founded WazirX — India’s biggest crypto exchange then Tegro — A game asset marketplace.

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1. So what is SegWit?

In a nutshell, it is an improvement over the current bitcoin blockchain which reduces the size needed to store transactions in a block. This is done by removing certain signatures with counting serialized witness data as one unit and core block data as four units.

The name stands for Segregated Witness. Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness, in short, means to separate transaction signatures.

2. What is the benefit of SegWit?

The increased capacity to store more transactions means lower transaction fee, more transactions per block = faster transactions. In addition to that, it would also fix transaction malleability, an attack that lets a person change a Bitcoin transaction’s unique ID before the transaction is confirmed on the Bitcoin network.

3. Is my wallet address Legacy or SegWit? How to find out?

If you have the Legacy address then it means that you will be using addresses starting from 1… SegWit address means that you will be using addresses starting from 3… or bc1… (one is for P2SH nested SegWit and the other is for native SegWit). Note that 3… addresses are for P2SH addresses in general and are not just for SegWit. bc1… addresses are for SegWit specifically but not all wallets support it yet.

4. Can I transfer my BTC from Legacy to SegWit address as a normal BTC transfer?

Yes, SigWit is a soft fork and it is backward compatible.

5. Does it make a difference where I hold my bitcoins?

Yes. When you want to send money, transaction fees for spending a SegWit output will likely be lower from spending a legacy output.

6. Is SigWit on a different chain?

No, there are no two chains. SegWit is activated on the Bitcoin blockchain. It is backward compatible.

7. What is SigWit2x?

SigWit2x stands for SigWit + 2X block size = 2MB. This fork was due to launch in 2017 but later canceled as not many miners supported this.

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Read more about how to build Bitcoin P2P Exchange here.

Siddharth Menon, founder — WazirX, Building India’s leading Bitcoin exchange. Follow me on twitter.



Siddharth Menon ( WazirX founder)

Founder & COO @WazirX. Building India’s biggest Bitcoin Exchange.