Understanding SegWit

Damilola Debel
Published in
3 min readOct 21, 2021


Scalability is one of several challenges that exist with blockchain technology. As more people began to adopt Bitcoin, the number of transactions issued every second increased, and the Bitcoin protocol has a limited amount of space for every block, approximately 1 megabyte per 10 minutes.

Each block contains several pieces of information such as block number, nonce, timestamp, hash, previous hash, several transactions, etc. Some of the content of an individual transaction include:

  • From: Who initiated the transaction.
  • To: Who is receiving it.
  • Amount: Transaction amount.
  • Signature: Proof that the owner of the funds was the one who authorized the transaction.
  • Public Key: The hash of the public key creates the address.

The Signature and Public key can account for up to 60% of the total transaction size, even though they are not the primary purpose of the transaction. The basic concept behind SegWit is to restructure block data so that the 60% (also called the scriptSig) are not stored with the transaction data. More specifically, the SegWit improvement consists of the segregating of witnesses (signature) and transaction data. Thereby allowing for more transactions to be stored in a single block, increasing the network’s overall scalability.

Benefits of SegWit?

Increase in block capacity: By removing the scriptSig data from the transaction input, SegWit reduces the transaction size and increases the number of transactions that can be stored per block.

Transaction speed increase: As more transactions can be stored per block, this increases transaction speed, as there will be more transactions running through the blockchain at once.

Lower fee: As a result of the reduced transaction size, SegWit transactions can be up to 40 percent less expensive.

SegWit in AirGap

SegWit comes with a new address format: bc1q5tg93ty5haggl0yetvdkcadkexujwruk6nhvns (begins with ‘bc1’)

To fully benefit from this update, our Users will need to migrate their Bitcoin to a SegWit address, such as the one shown above. When you migrate to a SegWit address and use a SegWit address to receive any future deposits, you’ll pay smaller fees when it comes time to send the Bitcoin.

Migrating to SegWit is optional. There is no security issue if you keep your funds on the old/legacy address (1N75SpaNW2x4YZLwfgvSxxwDcSF3njdNE3, being with ‘1’ ). It only makes sense if you frequently use your BTC address, because you can save on fees.

Migrating to Native SegWit on AirGap

First update the Vault app to version 3.11.0 or higher

Add a new account, select Bitcoin (SegWit) BTC and click the CREATE button. (image 1).

You should now have two Bitcoin addresses. The legacy one that was initially set up and the SegWit we just set up. (image 2)

Image 1, 2

Sync both to the wallet. Copy the SegWit address, go to the wallet and transfer from the legacy address to the SegWit own. Voila.

AirGap now supports PSBTs

PSBTs, or “Partially Signed Bitcoin Transactions” (BIP-174) is a new standard that standardizes how transaction information is transferred between different parties. This allows for easier offline signing, as well as easier multisig management. AirGap Vault now internally uses the PSBT standard. In the future, this will allow us to make AirGap Vault compatible with other watch-only wallets like Sparrow or Blue Wallet. This is not quite ready yet, but we do expect this feature to be available in one of the next releases.

Do you have any questions regarding AirGap?
Reach out to us via Discord or visit the AirGap help center.

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