Bitcoin has been regarded as a currency by a few countries and regulatory bodies, it has been regarded as security by others while for investors it is seen as both a security and a safe haven against inflation but then what are the types of Bitcoin networks available.
First, I need to clarify that Bitcoin is built on a blockchain and the blockchain is a decentralized, irreversible ledger in which data are stored in blocks. For every block being produced, a set of data is stored in the ledger and miners need to approve the blocks by signing on it. Either it is a Native SegWit Bitcoin network, Legacy Bitcoin Network, or Nested SegWit Bitcoin Network, they all run on the same blockchain.
Bitcoin Wallet
The Bitcoin wallet is a combination of alphanumerics within 26 and 35 characters and it doesn't matter if it is a Legacy network, Native or Nested SegWit, the important thing is that they all transact on the same blockchain but might not be able to transact between wallets on a different blockchain. A Legacy Bitcoin wallet will keep sending to legacy wallets on the same network until it reaches a wallet that supports SegWit, then the Bitcoin can change to a SegWit wallet if it is sent to a SegWit network address. Bitcoin Address networks can be represented as P2PKH, P2SH, and bech32 and although the legacy address is supported by virtually all address but not all support the SegWit upgrades and it is possible that they won't support bech32 amongst the three.
Legacy Wallet [P2PKH]
This was the original type of Bitcoin network that existed without an upgrade. P2PKH stands for Pay-to-Pubkey Hash and the address starts with "1". This network is more expensive and slow, as well it has a lot of witness signatures on each data inputted into the blockchain.
Nested SegWit Bitcoin Network [P2SH]
Nested SegWit was the first type of upgrade or soft fork that occurred on the Bitcoin Blockchain. P2SH stands for pay to script hash, With an upgrade on the network allowing for more data in a block, faster transaction period as there is a separation of data from the witness signature.
Native Segwit Bitcoin Network [Bech32]
This is the latest Bitcoin network upgraded address with its address starting with "bc1". The address unlike Legacy network and Nested Segwit Network, is longer. There are a lot of exchanges that do not support the Native Segwit network but a few wallets accept
Which do I Choose
This is dependent on the situation I get caught up in. Since a lot of exchange does not accept Native SegWit address, it would only be a choice for exchanges that supports it. While if I were to send based on all networks, I would prefer to choose the Nested Segwit since it is the actual upgraded version of the Bitcoin Network and since it is acceptable by a lot of wallets and exchanges, and it has a lower fee, and faster time-taken. I would only use Legacy wallet if I do not have a choice maybe because the recipient wallet do not support SegWit.
Hello friend, sharing your thought about the Bitcoin Legacy network and the Segwit network, I hope to see more of you in the subsequent classes.
Question: Having blockchain projects like TRX, ETH, EOS, perform more transactions with little to no scalability problem, do you think Bitcoin would still hold its position as king of cryptocurrency or will people go to other cryptocurrencies?
Rating 8/10
Downvoting a post can decrease pending rewards and make it less visible. Common reasons:
Submit