A SegWit address, also known as a Segregated Witness address, is a type of Bitcoin address that uses a specific transaction format known as Segregated Witness. This format was implemented through a soft fork in August 2017, and it aims to improve the efficiency and security of Bitcoin transactions.
SegWit addresses are distinct from legacy Bitcoin addresses and are recognized by their prefix, which is “bc1”. One of the main advantages of SegWit addresses is that they can handle a larger amount of transaction data, resulting in a faster and more efficient network.
This is achieved through the segregation of the signature data, or witness, from the transaction data. This allows more transaction data to be stored in each block, which increases the number of transactions that can be processed at once. Additionally, SegWit addresses also offer lower transaction fees compared to legacy addresses, as they are smaller in size.
Another important feature of SegWit addresses is their ability to enhance the security of Bitcoin transactions. Since the signature data is separated from the transaction data, it makes it more difficult for attackers to manipulate or alter the transaction data, which reduces the risk of certain types of attacks, such as transaction malleability.
In fact, the majority of Bitcoin transactions now use SegWit addresses, which has significantly improved the efficiency and security of the network as a whole. Overall, SegWit addresses are an important development in the Bitcoin ecosystem that has improved the scalability, efficiency, and security of the network, and their adoption is likely to continue to increase in the future.