Congratulations! Bitcoin got its SegWit upgrade. But where’s your upgrade?
Do you want:
- Faster transactions
- Lower fees
- More payment options
- And more security?
Learn how you can send your Bitcoin funds on SegWit transactions right now!
1. You need a wallet who supports SegWit transactions
Here are the wallets who claim their support for the upgraded transactions: AirBitz, Armory, BreadWallet, Blockchain.info, Electrum, GreenAddress, KeepKey, Ledger, Mycelium, Trezor, and SamouraiWallet.
If your current wallet is on this list, you are one update away for a ready to use software (or firmware update for the hardware wallets).
If you’re using a wallet who isn’t planning SegWit support, you’ll need to get one which does. The companies above are listed in alphabetical order. Do you own research before making your final choice.
2. Create a new account
After the software update, there will be two sets of different accounts available in your Bitcoin wallet.
In both cases (using the same wallet or a fresh new one), if you wish to use new SegWit features, you will need to create a new SegWit account and move your funds to the newly created one.
You legacy accounts (your old accounts from before SegWit) won’t be affected in any way. They will continue to function in the same way they did so far.
3. Generate a SegWit (P2SH-P2WPKH) address
Your old addresses (with prefix 1) will continue working, but they won’t support the new features.
The new SegWit addresses can be recognized by prefix 0x02 or 0x03. Use your wallet’s instructions to generate yours.
All transactions created from this address will allow the witness data to be segregated and save on block space.
- A transaction between two SegWit addresses is a SegWit transaction.
- A transaction sent from a SegWit address to a non-SegWit address is a SegWit transaction.
- A transaction sent from a non-SegWit address to a SegWit address is NOT a SegWit transaction.
4. Move your funds to your SegWit account
Witness space can only be used when spending outputs received on a SegWit address. You first have to receive money to a SegWit address.
As SegWit uses P2SH-P2WPKH addresses, you can only leverage its benefits after you move your coins to your new wallet by sending a normal bitcoin transaction to your own newly-created address.
Send a P2PKH payment from your old address (with prefix 1) to your SegWit (0x02 or 0x03) address.
Now you are ready to send and receive funds benefiting of SegWit benefits!
What’s the catch?
This is a free technology upgrade for all the Bitcoin users!
There is no security risk from using this feature.
SegWit will more than double the current transaction capacity of the Bitcoin network.
When the Lightning Network will be functional and in use, new features including atomic swaps, which allows for the instant and almost free exchange of cryptocurrencies over different blockchains, like Bitcoin and Litecoin will become available.
And this is just the beginning! The future will bring us:
- Decentralized applications on Bitcoin – just like Ethereum!
- Almost instant transactions
- Zero transaction fees
- Support for micro-payments
If you do not want to use SegWit features, there is no need to do anything. But the SegWit road is paved only with benefits!
Disclaimer: the author does not promote any of the wallet software listed in the article as better than others. Do your own research and pick wisely!