What Is SegWit (Segregated Witness)?
Segregated Witness (abbreviated as SegWit) is an implemented protocol upgrade intended to provide protection from transaction malleability and increase block capacity, among other benefits.
Normal bitcoin transactions contain one or more inputs and one or more outputs. The creator of the transaction spends the coins from the inputs and sends them to the outputs.
For a transaction to be valid, it needs to verify its inputs, proving its ownership. This is usually done by providing one or more digital signatures for each input. This information is called the “witness” and traditionally it was embedded on the transaction and in the blockchain once the transaction was mined.
SegWit allows the witness of the transaction to be left out of the blockchain, saving space. This means that SegWit transactions get a discount on the transaction size’s calculation, and they therefore pay less in fees than comparable non segwit transactions.
The savings on transaction fees depend on many factors, but they are about 30% on simple wallets, and 50%+ on multisig wallets with 2 or more copayers.
To create a SegWit wallet in the BitPay App:
- Open the BitPay App.
- Click the wallet icon in the tabs bar at the bottom.
- If you have one Key, click the three dots in the top right corner and choose Create a new wallet. If you have 2 or more Keys click the + sign of the key where you want to create the wallet.
4. Click Simple Wallet. (What is a shared wallet?)
5. Select bitcoin as the currency. (This kind of wallet is specific to bitcoin.)
6. Click Show Advanced Options.
7. Enable Segwit.
8. Click CREATE.