SegWit and Taproot are two major upgrades to Bitcoin. SegWit took effect on 24 August 2017 and Taproot on 14 November 2021. Both were introduced as a soft forkForkA change to a blockchain's rules; if not every node follows the change, the chain can split into two separate chains, each with its own coin.. Older software therefore kept accepting the new blocks, and the chain didn't split.
SegWit (2017)
SegWit is short for segregated witness, which refers to keeping a transaction's signatures separate. They sit in a special part of the transaction that weighs less when space in a block is calculated. This had three effects:
- Lower fees. SegWit transactions take up less of the counted space in a block, so they cost less.
- More room. More transactions fit into each block.
- A flaw fixed. Before SegWit, it was possible to change the transaction IDTransaction ID (TXID)The unique identifier of a transaction, a long string of letters and numbers that anyone can look up in a block explorer. of an unconfirmed transaction without changing what it did. SegWit fixed this and paved the way for the Lightning NetworkLightning NetworkA payment network on top of Bitcoin that makes bitcoin payments almost instant and cheap, without recording each payment on the blockchain..
Taproot (2021)
Taproot introduced a new kind of digital signature, called Schnorr signatures. Complex transactions, for example from a wallet that needs several signatures (MultisigMultisigA wallet set-up that needs signatures from more than one key before crypto can be sent, for example two out of three.), can now look just like an ordinary payment. Only the conditions actually used need to be revealed. That improves privacy and saves space.
What do you see as a user?
The start of a wallet addressWallet addressA string of letters and numbers you give out to receive crypto, much like a bank account number. tells you its type:
- 1: the oldest type (legacy)
- 3: an older type, used among other things for multisig and an earlier form of SegWit
- bc1q: SegWit
- bc1p: Taproot
When you spend crypto from a SegWit or Taproot address, the fee is usually lower than from the older types. Addresses starting with bc1 are also written in lower case and include error detection that catches most typing mistakes. Some older wallets and services can't send to the newest types, though.
Everything in Myntkaup Learn is written and regularly reviewed by the Myntkaup editorial team. It is for education and is not investment advice. Editorial policy. Updated 18 October 2026.