What BTC 'Address Type' Do I Select When Depositing Funds Into My Tradiso Account With Bitcoin?
When depositing Bitcoin into your Tradiso account, you have two options: Legacy and SegWit address types. Here's a detailed overview of each and how they differ:
1. Legacy Addresses:
- Address Format: Legacy addresses start with '1' (e.g., 1ABC...).
- Compatibility: These are the original Bitcoin address format and are compatible with all Bitcoin wallets, exchanges, and services, making them ideal for full compatibility.
- Transaction Fees & Speed: Transactions sent to and from Legacy addresses generally incur higher fees and can take longer to confirm compared to SegWit transactions due to how data is handled on the Bitcoin blockchain.
2. SegWit Addresses:
- Address Format: SegWit addresses begin with either '3' (P2SH) or 'bc1' (Bech32 format).
- Benefits:
- Lower Fees: SegWit transactions reduce the amount of data used in each block, leading to lower transaction fees.
- Faster Processing: With improved data handling, SegWit transactions generally confirm faster than Legacy transactions.
- Compatibility: While widely supported by most modern wallets and exchanges, some older platforms may not fully support SegWit addresses, especially the "bc1" format.
Key Differences Between Legacy and SegWit:
The primary distinction between these two address types lies in the structure of transaction data on the Bitcoin blockchain. This impacts:
- Transaction Fees: SegWit transactions are more efficient and thus typically have lower fees.
- Processing Time: Due to optimized data handling, SegWit transactions usually confirm more quickly.
- Compatibility: Legacy addresses provide maximum compatibility across all platforms but come at the cost of higher fees and potentially longer confirmation times.
Which Address Should You Use?
- SegWit is generally the preferred option for most users, offering cost-effective and fast transactions. If you're aiming for quicker deposits with lower fees, SegWit is your best bet.
- However, if you're using a platform or wallet that might not fully support SegWit, you can opt for a Legacy address to ensure compatibility. Be mindful that it may result in higher fees and slower processing times.
Important Reminder:
Network conditions, such as congestion or high activity, can affect both fees and confirmation times. It's always good practice to check the current state of the network before making large deposits.
If you have any additional questions or need further clarification, please don’t hesitate to reach out to us at support@tradiso.com.