Electrum 3.0 is out !

[PVminer]

It's a good development for electrum, but address start with bc1*** is a native segwit standard?

There are two segwit address types (with 2 subtypes each): native segwit format, draft BIP173-encoded starting with bc1, and one embedded in the P2SH address (starting with 3).
You can create both in Electrum but the P2SH-embedded require either specifying BIP39 seed (with BIP49  m/49'/0'/0' path) or a hardware wallet. You cannot create such a wallet with the native Electrum seed only classic or pure segwit.

See, also my description of all nuances here:
https://bitcointalk.org/index.php?topic=2353665.msg24018980#msg24018980

Native segwit addresses are probably not a good idea for a general user yet (but maybe excellent for, e.g. exchange hot wallet) but P2SH embedded are fine as long as you can generate them.

I don't know about it, and doesn't have to start with "3" right? As long as it's segwit address, doesn't matter for me.
But, regarding segwit address cause low fees for bitcoin transaction, is it really worth? I mean, we pay very low fees such $0,4 but miners tend to pick higher fees to included into next block, especially for current market transactions, over 54,000 unconfirmed transactions.

It may not be a big deal for a typical user (but 30-40% savings are also nice) but for exchanges that have a lot of large multi-signature P2SH transactions, the savings are more than 50%. I'm surprised the adoption is so slow because, say, Bitpay or Coinbase would save millions easily (last 24h the whole network paid miners about $2M-worth BTC in fees), especially since it will decongest the mempool so the savings would be more than just savings in the size of the transactions. But they apparently prefer to complain instead of doing their part.

[Rahar02]

It may not be a big deal for a typical user (but 30-40% savings are also nice) but for exchanges that have a lot of large multi-signature P2SH transactions, the savings are more than 50%. I'm surprised the adoption is so slow because, say, Bitpay or Coinbase would save millions easily (last 24h the whole network paid miners about $2M-worth BTC in fees), especially since it will decongest the mempool so the savings would be more than just savings in the size of the transactions. But they apparently prefer to complain instead of doing their part.

Indeed, I'm just see it in my perspective but for big exchanges; they could save Million dollars fees within a month, a week, even every single day. There are few wallet developers which has been implemented P2SH-P2WPKH address as far as I know, such as Ledger wallet, bitcoin core, samourai wallet (on developing), and electrum 3.0. Ledger wallet is the first one I guess and electrum implemented segwit address after 2 months, not sure why this latest upgrade for segwit support is taking so long.

[PVminer]

Indeed, I'm just see it in my perspective but for big exchanges; they could save Million dollars fees within a month, a week, even every single day. There are few wallet developers which has been implemented P2SH-P2WPKH address as far as I know, such as Ledger wallet, bitcoin core, samourai wallet (on developing), and electrum 3.0. Ledger wallet is the first one I guess and electrum implemented segwit address after 2 months, not sure why this latest upgrade for segwit support is taking so long.

Bitcoin core has a working segwit support since 2016 (of course then working only on testnet). It was not included in the stable versions because before segwit activation, users would lose funds. Electrum added initial segwit support in January 2017. Electrum delayed segwit in stable versions because of interoperability issues (importing segwit keys is not completely standarized) and adding segwit support to hardware wallets.

Bitcoin core was supposed to have segwit GUI in 0.15.1 but they had to work around these stupid Bitcoin forks (code for disconnecting B2X nodes had to be added first). I'm pretty sure exchanges also spend quite a lot of man-hours on these forks and segwit is no so pressing. So maybe these crazy times of Bitcoin forking, segwit support will start to roll out faster.

[TheQuin]

There are two segwit address types (with 2 subtypes each): native segwit format, draft BIP173-encoded starting with bc1, and one embedded in the P2SH address (starting with 3).
You can create both in Electrum but the P2SH-embedded require either specifying BIP39 seed (with BIP49  m/49'/0'/0' path) or a hardware wallet. You cannot create such a wallet with the native Electrum seed only classic or pure segwit.

See, also my description of all nuances here:
https://bitcointalk.org/index.php?topic=2353665.msg24018980#msg24018980

Native segwit addresses are probably not a good idea for a general user yet (but maybe excellent for, e.g. exchange hot wallet) but P2SH embedded are fine as long as you can generate them.

Thank you very much for the information, you saved me a lot of time searching for this stuff. I have read through some of the other thread you linked to as well but I just want to make sure I have understood correctly.

I've created a new Segwit wallet which has the addresses starting bc1. Am I correct in thinking that any Electrum wallet that is version 3 can send a transaction to these addresses but no other wallet can?
Secondly, (this is the bit I'm more unsure about) I can send from that wallet to all other addresses as the transaction is processed on the blockchain not by the receiving wallet?

[TryNinja]

I've created a new Segwit wallet which has the addresses starting bc1. Am I correct in thinking that any Electrum wallet that is version 3 can send a transaction to these addresses but no other wallet can?

I imagine that every address/wallet can send to this kind of address. But most of the services and wallet won't support it by now, which makes it impossible to withdraw from your exchange account, for example.

Secondly, (this is the bit I'm more unsure about) I can send from that wallet to all other addresses as the transaction is processed on the blockchain not by the receiving wallet?

Yes. You can actually see this kind of address in the transaction if you check the tx ID at Blockchain.info; You just need to enable the Advanced mode.

Here is an example: https://blockchain.info/tx/7b269691a2716da306d88cfc08e088e176654148c2b79f3c94c62ffca657c038

[PVminer]

I've created a new Segwit wallet which has the addresses starting bc1. Am I correct in thinking that any Electrum wallet that is version 3 can send a transaction to these addresses but no other wallet can?

Yes, Electrum 3 can send to this address from any wallet.

The support for bech32 is indeed very weak but Bitcoin Core can also send to (and receive) this address if you compile from github source. The bech32 support was included in commit aa624b6. There might be some other wallets that support it because these transactions can be spotted in the wild from time to time.

Secondly, (this is the bit I'm more unsure about) I can send from that wallet to all other addresses as the transaction is processed on the blockchain not by the receiving wallet?

Support for these transactions is defined in BIP141 (Segwit softfork), so all the miners and all the nodes that understand segwit will process it correctly. Full Segwit support was added in Bitcoin Core 0.13.1 and these nodes and above will validate and forward these transactions. Being soft fork it is still valid in earlier versions but earlier versions will think that anyone could have spent such transaction because they ignore the witness signature. 

I haven't tested any other software except for Electrum and Bitcoin Core. I sent and received P2SH-P2WPKH transactions on mainnet but I tested P2WPKH bech32 only on the testnet. Works both ways between Electrum wallets, and from/to Bitcoin Core with aa624b6 commit. Check the testnet to make yourself comfortable with it.

[TheQuin]

@ TryNinja & PVminer, Thanks for your answers, I think I understand it much more clearly now.

The support for bech32 is indeed very weak but Bitcoin Core can also send to (and receive) this address if you compile from github source.  transactions can be spotted in the wild from time to time.

That's interesting, so there isn't really any reason for this not to get more widely adopted then.

[PVminer]

That's interesting, so there isn't really any reason for this not to get more widely adopted then.

Two problems. Firstly, BIP173 (bech32) is relatively fresh (was designed later than segwit itself) so support for it also is very new. Secondly, inertia. Adoption of P2SH-P2WPKH is fairly slow (and it's fully compatible both ways from the start) and bech32/P2WPKH is partly incompatible with old wallets. But bech32 is very nice, much better than base58 standard and pure P2WPKH save additional transaction size compared to P2SH-P2WPKH. Also P2WSH (for pure segwit multi-signature transactions) are more secure that legacy multisignature.  For 160-bit hash one can find a collision in 2^80 operations (it's doable with a large fraction of the bitcoin hashrate within weeks) if one can craft one of the public keys for the multisig. P2WSH are 256-bit and 2^128 operations are infeasible. Eventually, people will upgrade to bech32 but the adoption will not be fast.

[cynical]

1/ Could someone explain in simple words, for the average users, what are the main benefits of Electrum 3.0 vs 2.9.3?

The fees are reduced due to each inputer being smaller as some of the data is stored in relation to the original address (the one beginning with a 1), and some is stored in relation to the segwit address (the segwit address). Although someone may be able to explain this more clearly than I can

What this segwit support is used for? Has this something to do with the forthcoming fork?

This specifically is to do with the August 1^st fork this year. The upcoming fork is Segwit2x. The August 1st fork was the Segwit one that this supports.

2/ If we are using ver.2.9.3 now, how shall be proceeded in installation process? Should we de-install the old version and re-install the new one, or we may install straight over v.2.9.3?

Write down you seed and if you install the new wallet in the way you previously installed the last one and it uses a heuristic algorithm so should be able to find your wallet file and if not, import your seed.

3/ Should we be in a hurry at all to install the 3.0 version?

No it just means that you can send with lower fees.
You do have to send the coins to a P2SK(/segwit) address before you can sign a segwit transaction.

thanks for the information!
this is great news from electrum.
what happens if we do not upgrade to the new V3 wallet immediately?
I am thinking of waiting until further updates are released as i am a small user with not that many transactions yet.

[jackg]

1/ Could someone explain in simple words, for the average users, what are the main benefits of Electrum 3.0 vs 2.9.3?

The fees are reduced due to each inputer being smaller as some of the data is stored in relation to the original address (the one beginning with a 1), and some is stored in relation to the segwit address (the segwit address). Although someone may be able to explain this more clearly than I can

What this segwit support is used for? Has this something to do with the forthcoming fork?

This specifically is to do with the August 1^st fork this year. The upcoming fork is Segwit2x. The August 1st fork was the Segwit one that this supports.

2/ If we are using ver.2.9.3 now, how shall be proceeded in installation process? Should we de-install the old version and re-install the new one, or we may install straight over v.2.9.3?

Write down you seed and if you install the new wallet in the way you previously installed the last one and it uses a heuristic algorithm so should be able to find your wallet file and if not, import your seed.

3/ Should we be in a hurry at all to install the 3.0 version?

No it just means that you can send with lower fees.
You do have to send the coins to a P2SK(/segwit) address before you can sign a segwit transaction.

thanks for the information!
this is great news from electrum.
what happens if we do not upgrade to the new V3 wallet immediately?
I am thinking of waiting until further updates are released as i am a small user with not that many transactions yet.

You should be fine not updating instantly. The bitcoin core devs are good at backwards compatibility and as this would be a blockchain issue and not directly an electrum issue. There's both forwards and backwards compatibility systens so that bech addresses, segwit addresses and legacy addresses. Me and some other users aren't able to update the software yet due to issues with the Python update from 2 to 3 (I currently have nothing in electrum though).

[metallicelmo]

Can you give me some advice? I have Electrum 2.8.3 running on an old pc. Just to store bitcoin nothing more. Should I update the software every time or can I safely keep this version "offline" for months / years?

[TryNinja]

Can you give me some advice? I have Electrum 2.8.3 running on an old pc. Just to store bitcoin nothing more. Should I update the software every time or can I safely keep this version "offline" for months / years?

Why wouldn't you update it? Just download the installer, move to a flash drive and install it in your offline pc. You don't need internet connection to update your wallet.

But yeah, it's not that big deal if there is no critical bug that was fixed in the new update.

[HCP]

Why wouldn't you update it?

Because the newer versions don't play nicely with some older versions of Windows that are likely to be on "an old pc".

Honestly, if the old version is working fine... and it is purely for offline long term storage... then you probably don't need to worry about updating. It is only likely to be an issue when you decide you want to spend. There have been issues in the past with older versions not being able to sync properly. You may find that in the future, when you want to spend, you'll need to update to a newer version.

[jackg]

Why wouldn't you update it?

Because the newer versions don't play nicely with some older versions of Windows that are likely to be on "an old pc".

Honestly, if the old version is working fine... and it is purely for offline long term storage... then you probably don't need to worry about updating. It is only likely to be an issue when you decide you want to spend. There have been issues in the past with older versions not being able to sync properly. You may find that in the future, when you want to spend, you'll need to update to a newer version.

The spending issue appeared to stem from the bcc fork (it did for me anyway).
Since you can select the server to connect to there should be very little issues. And there is no electron2x as far as I can tell so it might be less of an issue.

There are also thoughts that the new bech addresses are still in a sort of experimental phase and may not function correctly (it's unlikely you'll lose anything to this but it's still possible).

[Spendulus]

I just created a new segwit wallet but my new address start with bc1*************** and not with 3*********
Why?

This is a native segwit standard (so called bech32 address using P2WPKH) but this is not yet supported by merchants or other wallets. The addresses starting with 3 are P2SH addresses. They can specify many things, including segwit embedded inside P2SH (P2SH-P2WPKH). I figured out how to create such a wallet in Electrum (use BIP39 seed and m/49'/1'/0' derivation path) but it may be better to wait for some more official tutorials.

Unfortunately, segwit wallets are not standardized yet and there might be problems with importing/exporting keys between wallets.

It's a good development for electrum, but address start with bc1*** is a native segwit standard? I don't know about it, and doesn't have to start with "3" right? As long as it's segwit address, doesn't matter for me.
But, regarding segwit address cause low fees for bitcoin transaction, is it really worth? I mean, we pay very low fees such $0,4 but miners tend to pick higher fees to included into next block, especially for current market transactions, over 54,000 unconfirmed transactions.

Going with the "bc1***" on there own was a serious mistake.

There is enough confusion already, without developers placing burdens on the entire software community to support their latest style of encoding of the same data.

[PVminer]

Going with the "bc1***" on there own was a serious mistake.

There is enough confusion already, without developers placing burdens on the entire software community to support their latest style of encoding of the same data.

I disagree. P2WPKH and P2PWSH are incompatible with earlier wallets anyway and required their own addresses. BIP142 proposed cramming them into base58 format and the result was ugly. P2PWPKH started with letter "p" and P2PWSH with number "7". The latter were longer than usual base58 addresses. Base58 has a lot of limitations (mixed case is one of them; try to spell it via telephone or type on a mobile keyboard). Bech32 is much superior and now there is a clear upgrade path. Legacy addresses are base58, pure segwit is bech32. It is good that they look completely different because you can clearly see which is which.

[mano21]

Should I upgrade on mac?

I am not running latest version Mac OS

Can you upgrade from the electrum program itself?

Thanks

[jackg]

Should I upgrade on mac?

I am not running latest version Mac OS

Can you upgrade from the electrum program itself?

Thanks

Until now, there have been no issues with the latest version of electrum on Mac that I have seen.

No, you have to download the next version from their website www.electrum.org/#download. You can keep the older version while you check the new version works as well then and even after then.

[Spendulus]

Going with the "bc1***" on there own was a serious mistake.

There is enough confusion already, without developers placing burdens on the entire software community to support their latest style of encoding of the same data.

I disagree. P2WPKH and P2PWSH are incompatible with earlier wallets anyway and required their own addresses. BIP142 proposed cramming them into base58 format and the result was ugly. P2PWPKH started with letter "p" and P2PWSH with number "7". The latter were longer than usual base58 addresses. Base58 has a lot of limitations (mixed case is one of them; try to spell it via telephone or type on a mobile keyboard). Bech32 is much superior and now there is a clear upgrade path. Legacy addresses are base58, pure segwit is bech32. It is good that they look completely different because you can clearly see which is which.

I agree with everything you have said. I like bech32 much better, it is practically no different than typing hex.

But that wasn't my point. I said that for electrum to "go with bc1***" on their own was a serious mistake. Think of it as a business mistake, not a technical one.

Better would have been at some get together, for a half dozen of the major players to announce support for bech32 "within a year."

[TheQuin]

But that wasn't my point. I said that for electrum to "go with bc1***" on their own was a serious mistake. Think of it as a business mistake, not a technical one.

Better would have been at some get together, for a half dozen of the major players to announce support for bech32 "within a year."

I would view this from a different perspective. Electrum already has a large user base so by going first they will encourage others to follow. Some will start to hassle sites about making withdrawals to bech32 addresses and this will speed things up. Other wallets will not want to lose market share to Electrum if people switch to it because of this, so they will feel pressured into making it available as well. At least that's what I hope will happen.