Ledger, a leading provider of bitcoin hardware wallets has announced support for SegWit, the long-awaited pack of optimizations to scale the Bitcoin network. With SegWit having just been activated, vendors are starting to roll out support for the added benefits, this is no exception with Ledger’s hardware wallet products.
In order to use SegWit optimizations, users will need to use funds stored on a SegWit address which uses a different format — currently encoded as a multi-signature (P2SH) address (starting with a 3 on Bitcoin mainnet)
Users can access a new SegWit address or legacy addresses (where current funds are stored) when starting the Bitcoin Wallet Chrome application (from v1.9.0).
As Segwit migration is fully opt-in, users can continue to use only legacy addresses.
If wishing to upgrade, Ledger users can recreate the same account naming and structure on the SegWit branch and move funds from the legacy branch to the SegWit branch by doing a normal bitcoin transaction.
As upgrading to SegWit addresses helps to provide more block capacity for every user, it’s definitely recommended to upgrade. Note that the sender doesn’t need to upgrade, every wallet can natively send funds to a SegWit address.
Signature time optimization
When computing a SegWit signature, the previous transactions do not need to be processed by the device, and each input is only processed once during the signature process, leading up to a 60% time optimization in the signature process.
Using a SegWit address is definitely recommended if you plan to collect small transactions such as mining rewards.
Lower transaction fees
SegWit introduces the concept of block weight which changes the way the transaction size is computed by splitting the signatures in a different area — you can typically save 35% of the fee paid when sending a transaction immediately.
Future scaling optimizations
SegWit paves the way to multiple Bitcoin scripting optimizations (through anti malleability and script versioning) — the Ledger team is closely monitoring progress on those different topics to make available the Ledger Hardware Wallet with those innovations (such as the Lightning Network) as soon as possible.
Segregated Witness and third-party wallets
SegWit support for Ledger products is available in GreenAddress (desktop, Android) and GreenBits (Android).
Segregated Witness and other networks
Segwit support is also available for Litecoin.
– SegWit addresses are available for Ledger Nano S with no firmware update and Ledger HW.1/Nano with a firmware update to version 1.0.3 required.
– Bitcoin Cash users should NEVER send Bitcoin Cash to a SegWit address generated on the Bitcoin network, you won’t be able to recover your coins.
For more information on Ledger’s Nano S bitcoin hardware wallet see the product spec page.