Legacy vs Segwit wallets. Whats the difference ?

[Prince8]

So ive always had my bitcoin in my hardware wallet. Now there are 2 options: Legacy and Segwit. Whats the actual difference ?

1. Can i transfer my btc from Legacy to Segwit as a normal BTC transfer ?
2a. Does it make a different where i hold my bitcoins ?
2b. Do they use the same hashpower ?
3. Considering segwit was activated, why my BTCs are not automatically on the Segwit chain (are there actually 2 chains ?)
4. Whats my play ?

i know that my questions are very much beginner questions, and some os my premises might be wrong. Please educate me

[achow101]

So ive always had my bitcoin in my hardware wallet. Now there are 2 options: Legacy and Segwit. Whats the actual difference ?

Legacy means that you will be using addresses of the form 1... Segwit means that you will be using addresses of the form 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.

1. Can i transfer my btc from Legacy to Segwit as a normal BTC transfer ?

Yes.

2a. Does it make a different 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.

2b. Do they use the same hashpower ?

Hashpower and addresses are unrelated. In fact, addresses don't even exist on the network; they are just a human abstraction that tells the wallet what to put in the output script of an output.

3. Considering segwit was activated, why my BTCs are not automatically on the Segwit chain (are there actually 2 chains ?)

No, no there are not two chains. Segwit is activated on the Bitcoin blockchain.

4. Whats my play ?

If you want to use segwit, get some segwit addresses and begin giving them out to people when you want to be paid. You can also make a transaction sending your coins to segwit addresses in your wallet. If you don't want to use segwit, then do nothing. Either way is safe.

[Prince8]

Thank you very much. Thats very clarifying !

Considering they are on the same blockchain, if "everyone" is using one or the other, there will always be miners working to process the transfer on the "not used" output ?!

So ive always had my bitcoin in my hardware wallet. Now there are 2 options: Legacy and Segwit. Whats the actual difference ?

Legacy means that you will be using addresses of the form 1... Segwit means that you will be using addresses of the form 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.

1. Can i transfer my btc from Legacy to Segwit as a normal BTC transfer ?

Yes.

2a. Does it make a different 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.

2b. Do they use the same hashpower ?

Hashpower and addresses are unrelated. In fact, addresses don't even exist on the network; they are just a human abstraction that tells the wallet what to put in the output script of an output.

3. Considering segwit was activated, why my BTCs are not automatically on the Segwit chain (are there actually 2 chains ?)

No, no there are not two chains. Segwit is activated on the Bitcoin blockchain.

4. Whats my play ?

If you want to use segwit, get some segwit addresses and begin giving them out to people when you want to be paid. You can also make a transaction sending your coins to segwit addresses in your wallet. If you don't want to use segwit, then do nothing. Either way is safe.

[HCP]

Considering they are on the same blockchain, if "everyone" is using one or the other, there will always be miners working to process the transfer on the "not used" output ?!

No, when you send a transaction, it doesn't attempt to send to multiple "versions" of the same "address" at the same time...

think of it like before SegWit... You had "1" addresses for "normal" Bitcoin addresses And "3" addresses for "MultiSig" addresses... When you sent to a 1, there wasn't some "not used output" going to a "3" address as well that miners were trying to process.

SegWit and legacy are just slightly different formats for representing the same thing... Where to assign control of some Bitcoins...

If you say, send to legacyAddressA, then ALL miners can only see a transaction that sends to legacyAddressA. If you say send to SegWitAddressA, then ALL miners can only see a transaction that sends to SegWitAddressA.

[freedomstreaming]

I haven't even seen a wallet supporting segwit transaction yet.

[TryNinja]

I haven't even seen a wallet supporting segwit transaction yet.

There are a few already.

- Armory
- BitGo
- Bitcoin Core by using the "addwitnessadress" console command. No easy UI implementation yet;
- GreenBits, GreenAddress and Airbitz for android;

Also, Electrum will probably support Segwit in the near future.

[HCP]

Here is a (slightly) outdated list of wallets and service providers that are currently (or plan to) supporting SegWit: https://bitcoincore.org/en/segwit_adoption/

NOTE: It seems it was last updated about 4 weeks ago... so there may be some errors or omissions

[columbo]

I have read that fees when sending from segwit addresses are lower than fees when sending from legacy addresses. Is it true? If so, what kind of differences are we talking about?

Also, using bitcoin core's "bitcoin-cli addwitnessaddress 15......" command, do we have to do anything when spending funds received to a segwit address? Will all other sendtoaddress and sendmany commands work like before?

What about the estimatesmartfee and settxfee commands? Right now, when the network is quite busy we had fees of 20-25 EUR to send out from legacy addresses (to be confirmed in time). Do we have to set the same transaction fees (by settxfee) as before?

Is this a correct assumption that the same transaction initiated from a segwit address is ALWAYS lower in size than the same transaction initiated from a legacy address?

[bob123]

I have read that fees when sending from segwit addresses are lower than fees when sending from legacy addresses. Is it true? If so, what kind of differences are we talking about?

A standard (legacy) transaction has the following size:
count of inputs * 180 + count of output * 34 + 10 = 224 +/- 40 byte

With segwit tx's the size is composed of:
count of inputs * 148 + count of output * 34 + 10 = 192 +/- 40 byte

Generally, your TX will be 32 bytes smaller per input.

What about the estimatesmartfee and settxfee commands? Right now, when the network is quite busy we had fees of 20-25 EUR to send out from legacy addresses (to be confirmed in time).
Do we have to set the same transaction fees (by settxfee) as before?

Generally fees are set in sat/B.
Since the only "fee-advantage" you have with segwit are the smaller transactions, you can just proceed with taking the same sat/B fee, and paying less.

Is this a correct assumption that the same transaction initiated from a segwit address is ALWAYS lower in size than the same transaction initiated from a legacy address?

Yes.

[HCP]

A standard (legacy) transaction has the following size:
count of inputs * 180 + count of output * 34 + 10 = 224 +/- 40 byte

With segwit tx's the size is composed of:
count of inputs * 148 + count of output * 34 + 10 = 192 +/- 40 byte

Generally, your TX will be 32 bytes smaller per input.

You've got yourself a little confused here... You seem to be confusing "legacy" and "segwit" transactions with uncompressed/compressed addresses

In "legacy" transactions... the input size is either ~180 bytes OR it is ~148 bytes depending on if you are using uncompressed or compressed addresses respectively... It is technically possible to use both compressed address and uncompressed address inputs in the same transaction, which gives us the following:

A standard (legacy) transaction using uncompressed address inputs only has the following size:
(count of inputs * 180) + (count of output * 34) + 10 (+/- 2 bytes per input)

A standard (legacy) transaction using compressed address inputs only has the following size:
(count of inputs * 148) + (count of output * 34) + 10 (+/- 2 bytes per input)

[qwerty10111]

I know this is an old question, but recently I goggled it and found this website:

https://segwitchecker.com

It seems that the website checks if the address is SegWit or legacy.

[o_e_l_e_o]

Bitcoin legacy address
Bitcoin Segwit address
Bitcoin native segwit address

If you are going to categorize addresses that way, then the correct categories are legacy, nested segwit, and native segwit, but there are other address types which are none of those, such as non segwit P2SH.

2a. Yes, When you use segwit address you will have these advantages. Reduced Transaction cost , Reduced Transaction time

SegWit transactions are not inherently faster than legacy. Rather, they work out cheaper to pay a higher fee.

3. There are no two blockchains. Segwit was originally planned as Hard Fork but later developers decided to go with Soft Fork in order to minimize the panic among the users.

I think you are confusing SegWit with SegWit2x, which was a proposed and rejected hard fork.

Please do not needlessly bump dead threads unless you have something meaningful to contribute.