How do I know if my wallet is SegWit?

To determine if your Bitcoin address is SegWit-enabled, you should first understand the characteristics of SegWit addresses. A key indicator is the prefix used in the address. SegWit-compatible Bitcoin addresses typically exhibit a distinct format that sets them apart from traditional addresses.

The most common prefixes for SegWit addresses are "3" and "bc1". These prefixes are crucial in identifying whether an address is SegWit-ready, as they signify the adoption of Segregated Witness (SegWit) technology.

Addresses starting with "3" are referred to as Pay to Script Hash (P2SH) addresses, which, despite their original purpose, now often serve as a wrapper for SegWit transactions. This means that even though they were not originally designed for SegWit, P2SH addresses can now be used to accommodate SegWit transactions, enhancing their efficiency and reducing fees.

On the other hand, addresses starting with "bc1" represent the native SegWit format, also known as Bech32. Bech32 addresses offer additional benefits over traditional and P2SH SegWit addresses, including more efficient data encoding and improved error detection capabilities.

To check if your Bitcoin address is SegWit-enabled, simply look at its prefix. If it starts with "3" or "bc1", then your address supports SegWit. This information is crucial for maximizing the efficiency and cost-effectiveness of your Bitcoin transactions.