Crypto Academy Week 3 Homework Post for [@gbenga] Segwit Bitcoin Network or Legacy Bitcoin Network, which do you prefer and why?

in SteemitCryptoAcademy • 4 years ago (edited)

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Imagr source

Bitcoin is a name that many people know. It is the first cryptocurrency and that's why the name has gone viral. Bitcoin was created to cut the third parties out of transactions giving every individual the power over his or her asset. The first bitcoin address that was used is the bitcoin address. When bitcoin was created in 2009, the address of every bitcoin wallet starts with 1 and they are mostly used now. However, some reasons and limitations gave birth to the use of another address which makes bitcoin have two different addresses. So in the first place, there was nothing like a legacy address. It was only called the bitcoin address. It was when the bitcoin block became bigger in 2017 that the developers came up with several ideas before the final solution was deployed, which was the segwit by increasing the block size from 2 to 4 MB without doing any hard fork

When the solution was arrived at which is saving space on the main chain, the signature data was removed to the second layer, which was referred to as the witness data. And this is known as the SEGREGATED WITNESS (SEGWIT). That was when the initial bitcoin address became the legacy address, and the new one was called segwit. So, the two types of addresses are
  • The legacy address ( legacy bitcoin network)
  • The segwit address ( Segwit bitcoin network)

But, there is a slight confusion. The Segwit address has two layers. It is divided into two. They are

  • Nested Segwit
  • Native Segwit

Initially, I talked about the legacy bitcoin address starting with Figure 1. Yes, there are specific codes to differentiate various bitcoin addresses.

1. Legacy bitcoin address (P2PKH) starts with 1. Any bitcoin address that starts with figure 1 is the first bitcoin address known as the legacy address

2. Nested Segwit (P2SH) starts with 3.

3. Native Segwit (bech32) starts with bc1

All these addresses are still bitcoin addresses that can be used to send and receive bitcoin.

So what's the pros and cons of the legacy and segwit bitcoin network

the-block-chain-3454588_960_720.jpg

image source. pixabay
As we are already aware that the legacy bitcoin network deals with the first created bitcoin blocks that mainly see to all bitcoin transactions on the blockchain, it has its advantage over the segwit network. As a matter of fact, the legacy network has a general capacity to support all wallets irrespective of anything. This is one powerful advantage the legacy bitcoin network has over the segwit network. Anyone can send bitcoin from any legacy bitcoin address to either any segwit or legacy bitcoin addresses
However, The segwit network that devised the plan to create more spaces for data has a good advantage too. The legacy network slows down transactions because of the storage capacity. Transactions on the legacy network are expensive too. The segwit bitcoin network came to fix all these limitations to help the bitcoin network stay afloat as the first of all and it has worked well

So with the few things I've discussed, they both have their advantages and disadvantages.

  • Legacy bitcoin network is supported by all wallets, while some wallets are still not segwit supportive. No matter the type of bitcoin wallet, a legacy address will always work on it.

  • If you give a segwit bitcoin wallet address to someone to send bitcoin to you, the person might tell you the address you give is not supported depending on the wallet the person is using. If it's a wallet that doesn't support segwit address, the transaction will fail.

  • Using the legacy bitcoin address to transact is expensive. The charges are somehow exorbitant.

  • The segwit addresses are the cheapest addresses for bitcoin transaction

  • Also, the segwit address can process more transactions per block compared to the legacy address. the segwit also makes the transaction faster because of the enormous space provided by the various witness signatures.

With all these facts about the legacy bitcoin and Segwit bitcoin network, I think they are both unique. I use both wallet addresses. On the mew wallet and trust wallet, the Segwit wallet address is supported and I use the wallet for transactions that I dim fit. Also, the Binance exchange uses the legacy bitcoin address and I use it when I have a transaction to fill on the exchange. By and large, both are unique. There are times the need for either would arise. However, if all wallets can support the segwit bitcoin network and make use of their addresses, I think I would be more comfortable because the segwit advantages outweigh that of the legacy Bitcoin network

Thanks for reading, and thanks to professor @gbenga for his wonderful topic/homework. More grace to your elbow.

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4 years ago in SteemitCryptoAcademy by
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