Wrapped SegWit
Wrapped SegWit is a design implementation included in the SegWit upgrade meant to enable wallets and other Bitcoin software to more easily support SegWit.
Wrapped SegWit is a design implementation included in the SegWit upgrade meant to enable wallets and other Bitcoin software to more easily support SegWit. In order to achieve this, the two native SegWit scripts, P2WPKH and P2WSH, are used as the “redeemScript” of a P2SH transaction, yielding wrapped SegWit script types of P2SH-P2WPKH and P2SH-P2WSH respectively. This design allows older wallets which do not support SegWit to send to SegWit outputs as long as they support sending to P2SH addresses.
Users who receive bitcoin to wrapped SegWit addresses are still able to save on transaction fees by using the Witness field, albeit to a lesser extent than if they use native SegWit scripts. Like all P2SH addresses, wrapped SegWit addresses will begin with a ‘3’ and use Base58 encoding, whereas native SegWit addresses will begin with a ‘bc1’ and use Bech32 encoding.
Wrapped SegWit is a Bitcoin protocol specification that defines technical standards for how Bitcoin software operates. Onramp's Bitcoin glossary provides detailed educational resources on Wrapped SegWit and other protocol-level concepts to help investors understand the technology underpinning their Bitcoin holdings.
Frequently Asked Questions
What is Wrapped SegWit?
Wrapped SegWit is a technical standard in the Bitcoin protocol that specifies how certain operations or data structures should be implemented. It helps ensure interoperability between different Bitcoin software implementations.
Why is Wrapped SegWit important for Bitcoin?
Wrapped SegWit improves Bitcoin's functionality, security, or efficiency. Technical standards like this ensure that all participants in the Bitcoin network follow consistent rules, maintaining network consensus.
How does Wrapped SegWit affect Bitcoin investors?
While Wrapped SegWit operates at the protocol level, Onramp ensures that clients benefit from these technical improvements through secure, up-to-date infrastructure for Bitcoin custody and transactions.
