Last month SegWit adoption passed the 75% milestone and it’s now supported by the vast majority of software and hardware around the Bitcoin ecosystem. Since 2019, BitGo has had API support for Native SegWit and in order to continue the adoption of Native SegWit we think it’s time to make it the default for more transaction outputs.

On August 9th, we modified our default change output type from Wrapped SegWit to Native SegWit, starting first with our testnet platform at test.bitgo.com. On August 24th, this new default will be enabled for all BitGo hot and Qualified Custodial Bitcoin wallets. This change will affect both UI and API customers and no action or upgrades should be needed to take advantage of this new default change output type.

Spending change to a Native SegWit output means when it’s time to spend that change output in a future transaction less block space will be required, resulting in lower fees paid for the transaction overall. Expected savings will be an average of 10% reduction in transaction fees depending on the specifics of each transaction.

As a user the only difference you should expect is that your transactions will pay less in fees on average.

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Our prior blog post on Native SegWit quantifies the savings:

Native SegWit inputs have a weight of 105 bytes, down from 140 bytes for Wrapped SegWit inputs and 297 bytes for non-SegWit Pay-to-Script-Hash (P2SH). That means Native SegWit inputs will be 25% cheaper than Wrapped SegWit inputs and 65% cheaper than non-SegWit inputs.

This new default will be enabled automatically and you’ll be able to tell that your transaction is using a Native SegWit change output by looking at the transaction in any block explorer. Native SegWit outputs use the Bech32 address format which starts with bc1 on Mainnet and tb1 on Testnet.

If you’d like to opt-out of Native SegWit change outputs as the default change output type for your transactions, you can pass the addressType parameter when sending a transaction to override the default value. For Wrapped SegWit (the prior default) you’ll need to pass the value “p2shP2wsh” for the addressType.

For BitGo UI customers, if you prefer using Wrapped SegWit change outputs please reach out to support@bitgo.com and we can modify the default change output type for your wallet.

Disclaimer: Data cited above current as of publication date. BitGo is not affiliated with any of the entities listed above, and the information provided is not a testimonial in support of any entity or recommendation for any services. No legal, tax, investment, or other advice is provided by any BitGo entity.

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