One of the novelties introduced by Mercury Cash this year are the SegWit addresses of Bitcoin, as mentioned in the previous article titled SegWit and new features come to Mercury Cash. But to understand the benefits that this represents for users, we want to expand a little more on the subject and thus see what is the real influence in the transactions with cryptocurrencies (mainly with Bitcoin).
What is SegWit?
SegWit is a method invented by Dr Piter Wuille to reduce the size of the blockchain blocks and thus speed up the response times of transactions. This is done by the total separation of the digital signature from the rest of the block, hence the name Segregated Witness, so the digital signature would remain as a separate element within what is the blockchain, without influencing the size of the block and therefore in the time of execution and validation of transactions.
Origin of SegWit
This need to separate the digital signature of the block from the transaction originated with the growth of Bitcoin itself and the increase in its transactions. The digital signature occupies approximately 65% of the size of the transaction block and this block had a limit size of only 1MB, with a digital signature occupying so much space it was practically impossible to increase the number of transactions, or rather, that to the extent in which the number of transactions increased, a quick response could be given to them.
In this sense, when seeing that, removing the signature as a segment apart from the block, the size could increase to 4MB its size and the response time of the transaction that had even reached hours, could be reduced to a few minutes, by That reason was decided to apply this method as a definitive solution to the response times of the transactions, which would be more useful to the extent that the volume of transactions carried out increased.
What is bitcoin legacy?
As SegWit provides an electronic address for a wallet (we will explain how to identify it later) Legacy is also a format that determines that it has been inherited from the original Bitcoin addresses that it has maintained since its inception. These types of addresses are also known as P2PKH. When the Bitcoin innovations arose, the addresses were modified slightly, assigning a different format to the new users, however, those who had (or have) original Bitcoin addresses can continue to use them without any problem, since adaptations have been made so that this is posible
How to recognize if my address is SegWit or is it Legacy?
It’s very simple, you just have to look at the way the address starts. The addresses of the wallets that belong to Bitcoin Legacy, that is, those inherited from the original Bitcoin, start with the number 1 and correspond to the P2PKH format that means Hash Pay To PubKey. On the other hand, the SegWit addresses start with number 3 or failing with the acronym bc1. The only drawback with SegWit addresses is that they are not yet supported by all the wallets.
What do you think about this topic? Did you know what the SegWit and Legacy Bitcoin addresses were about?
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