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What Is SegWit (Segregated Witness)? Benefits and Address Types

Segregated Witness (SegWit), specified in BIP-141, separates a transaction's signature data into a witness section that is not part of the transaction ID, which fixes a malleability problem and introduced block weight.

Key takeaways

What changed

Before SegWit, a transaction's signatures were included in the data that was hashed to make its ID. That created a problem: signatures could be re-encoded in ways that stayed valid but changed the ID, which complicated anything that tracked a transaction by its ID. Segregated Witness, specified in BIP-141, moves the signature data to a separate witness section that is committed to elsewhere, so the transaction ID no longer depends on it.

Benefits

The BIP describes preventing involuntary malleability: because signature data is no longer part of the transaction hash, changes to how it was signed cannot alter the ID. That also made it safer to build protocols that chain unconfirmed transactions together. A second benefit is capacity. Blocks are measured in weight, where witness bytes count less than other bytes, so transactions heavy in signature data take less block space for the same security and typically pay lower fees.

Address formats

SegWit outputs come in two forms. Wrapped SegWit places the witness program inside a pay-to-script-hash address so older wallets can pay it. Native SegWit uses the bech32 address format specified in BIP-173, with a human-readable prefix such as bc for Bitcoin, and ltc for Litecoin in its source code. Bech32 addresses are lowercase, include an error-detecting checksum and are easier to type and scan.

What it means for you

You rarely need to configure SegWit; a modern wallet chooses the address type for you. If you send to an address and get an error, check that the sending wallet supports that address format. The coins themselves are the same either way.

Example

Two wallets send the same payment: one spends legacy inputs and the other native SegWit inputs. The SegWit transaction occupies fewer virtual bytes because its signature data is counted at a quarter of the weight, so it pays a lower fee at the same fee rate.

Put it into practice

Let your wallet pick the address type

Scrypt Wallet gives you a receive address for each coin it supports, so you don't need to work out address formats yourself.

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Sources and verification

Last reviewed 2026-10-02 by the Scrypt Wallet team. The factual claims on this page, and where each comes from:

  1. Since signature data is no longer part of the transaction hash, involuntary malleability from signing changes is prevented. [1]
  2. Native SegWit addresses use the bech32 format defined in BIP-173 with a human-readable part such as bc. [2]
  3. Litecoin's source sets its bech32 human-readable prefix to ltc. [3]
  4. Segregated Witness was proposed as a protocol change to the Bitcoin transaction format. [4]

Sources

  1. BIP-141: Segregated Witness (consensus layer) · bitcoin/bips on GitHub · primary source
  2. BIP-173: Base32 address format for native v0-16 witness outputs · bitcoin/bips on GitHub · primary source
  3. Litecoin chainparams.cpp · litecoin-project/litecoin on GitHub · primary source
  4. Segregated Witness · Wikipedia · secondary source

Primary sources are protocol papers, specifications, source code or a project's own documentation; secondary sources are wikis and explainers. We checked each claim against the source text on the review date. Found an error? Tell us and we will correct it.

Frequently asked questions

Is SegWit a different coin?

No. It is an upgrade to the transaction format that Bitcoin and several derived coins adopted.

Do I need to do anything to use SegWit?

Usually not. Most modern wallets use SegWit address types by default where the coin supports them.

What is a bech32 address?

The address format for native SegWit outputs. It is lowercase, starts with a coin-specific prefix and includes a checksum.

Related terms

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Written by the Scrypt Wallet team · Updated 2026-10-02. General education, not financial, tax or legal advice.