Last Updated on January 19, 2022
Legacy: Pay To Public Key Hash
Legacy address (P2PKH – Pay To Public Key Hash) is a standard Bitcoin address format originally provided in the protocol and used by most crypto-purses and services.
- Low priority for miners because there are far fewer such transactions per block;
- Reduced cryptographic strength of the digital signature used by Bitcoin;
- Inflexible transactions.
SegWit: Segregated Witness Protocol, a 2016 Proposal
On August 24, 2017, the Bitcoin network underwent a soft fork that was proposed in March of 2016. The update included activation of the Segregated Witness protocol to increase block capacity (by separating the signature data from the transactions on the blockchain,) and protect from transaction malleability.
- More protection against errors.
- Increased transaction throughput.
- Reduced fees by up to 50%.
- The disadvantage of the updated protocol is that not all cryptocurrency services support it.