What is SegWit?

SegWit is a Bitcoin upgrade that changed how transaction data is stored, moving signatures into a separate "witness" section. It was specified in BIP 141, written by Eric Lombrozo, Johnson Lau and Pieter Wuille, and activated in August 2017 as a soft fork, meaning older nodes kept working. Most modern Bitcoin wallets now use SegWit addresses by default.

What problem did SegWit solve?

Before SegWit, anyone relaying an unconfirmed transaction could tweak how its signature was encoded and produce a different transaction ID for the same payment. This is called transaction malleability. BIP 141 fixed it by leaving witness data out of the transaction ID. OpenSats notes this made the Lightning Network and other off-chain systems practical, since they rely on chains of unconfirmed transactions.

SegWit also replaced the old 1 MB block size limit with a limit of 4 million "weight units." Witness bytes count as one unit each and other bytes as four, so signature-heavy SegWit transactions take up less of the limit.

What is a bc1 address?

A bc1 address is a native SegWit address written in a format called Bech32, defined in BIP 173 in 2017. The "bc" prefix marks Bitcoin mainnet. BIP 173 chose an all-lowercase format with a checksum that catches any error affecting up to four characters, which makes addresses easier to read aloud and type on a phone. Addresses beginning with bc1q use SegWit version 0. Addresses beginning with bc1p use the newer Bech32m format for Taproot.

What are the Bitcoin address types?

Trezor's guide lists four types you will see in wallets as of October 2026:

• Legacy (P2PKH): starts with 1, used by older wallets, generally the most expensive to spend from.
• Nested SegWit (P2SH): starts with 3, a bridge format that works when you are unsure the sender supports SegWit.
• Native SegWit (Bech32): starts with bc1q, widely supported and Trezor Suite's default.
• Taproot (Bech32m): starts with bc1p, the newest type, which some services still do not handle properly.

All of these are valid wallet addresses on the same network, and your wallet may show a fresh one each time you receive, as explained in why your Bitcoin address keeps changing.

Is native SegWit better than legacy?

For most people the main difference is cost and compatibility. Because witness data is discounted, spending from a native SegWit address typically uses less block space than spending from a legacy one, so fees are generally lower. Legacy addresses remain valid and still work everywhere. BIP 173 itself notes that only software supporting SegWit can send to bc1 addresses, which is why some very old services may ask for a 1 or 3 address instead. Trezor suggests Native SegWit as the default and nested SegWit as the fallback when you are not sure what the other side supports.