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๐Ÿš€ How I Added SegWit to My Rust Bitcoin Wallet (and Why You Should Too)

Why This Post?

When I first built my Bitcoin CLI wallet in Rust, it worked โ€” but it was stuck in the past.
It only supported legacy addresses (1...), which meant:

  • Higher fees ๐Ÿ’ธ
  • Slower confirmations ๐Ÿข
  • No Lightning Network โšก support

Then I integrated SegWit (Segregated Witness), and everything changed:
transactions got 35% cheaper, more secure, and finally ready for the Lightning era.

In this post, Iโ€™ll break down:

  • What SegWit really does (without the fluff)
  • How I implemented it in Rust step-by-step
  • Real-world results (performance, fees, and UX)
  • What this unlocks next (Lightning, Taproot, and beyond)

If youโ€™re building wallets, apps, or just curious about Bitcoin internals, this is your practical roadmap to SegWit.


๐Ÿงฉ SegWit in 60 Seconds

SegWit is a Bitcoin upgrade (2017) that separates witness data (signatures) from the main transaction.

Why it matters:

  • Fixes transaction malleability (critical for Lightning + smart contracts)
  • Makes transactions smaller & cheaper (up to 35% fee savings)
  • Expands block capacity without hard forks

Think of it like moving signatures into a side folder: the transaction stays valid, but the โ€œheavyโ€ parts donโ€™t clog up the main block.


โš–๏ธ Legacy vs SegWit: What Changes?

Feature Legacy (P2PKH) SegWit (P2WPKH)
Address format 1... bc1...
Signature placement In scriptSig In witness data
Bytes per input ~148 ~68 (vbytes)
Transaction malleable? โœ… Yes โŒ No
Fees Higher ~35% lower

Thatโ€™s the practical win: less bytes = less fees = happier users.


๐Ÿ›  Implementing SegWit in Rust

1. Address Generation

// Legacy
let legacy = Address::p2pkh(&compressed, Network::Testnet);

// SegWit (bech32)
let segwit = Address::p2wpkh(&compressed, Network::Testnet);
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๐Ÿ”‘ Key step: add bech32 encoding and witness program support.


2. Transaction Signing

// Legacy signing
let sighash = cache.legacy_signature_hash(
    input_index,
    &script_pubkey,
    EcdsaSighashType::All as u32,
)?;

// SegWit signing
let sighash = cache.p2wpkh_signature_hash(
    input_index,
    &script_code,
    Amount::from_sat(utxo.value),
    EcdsaSighashType::All,
)?;
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โšก Difference: SegWit stores signatures in witness data, not in the main script.


3. Fee Calculation with vBytes

let num_p2wpkh_inputs = selected_utxos.iter()
    .filter(|(addr, _)| addr.address.starts_with("tb1q"))
    .count() as u64;

let num_p2pkh_inputs = selected_utxos.len() as u64 - num_p2wpkh_inputs;

let estimated_size = num_p2pkh_inputs * 148 + num_p2wpkh_inputs * 68 +
                     dest_out_sz + change_out_sz + 10;
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SegWit inputs get a 75% discount in size โ†’ lower fees.


๐ŸŽฏ Real-World Results

After adding SegWit:

  • Transactions shrank from ~250 bytes โ†’ ~180 vbytes
  • Users paid 35% less in fees
  • Transactions confirmed faster (blocks fit more txs)
  • Wallet code became cleaner + ready for Lightning

This wasnโ€™t just an optimization โ€” it was a gateway to future Bitcoin features.


โšก Whatโ€™s Next?

SegWit laid the groundwork. Next stops:

  1. Lightning Network integration
  2. Taproot support (more privacy + efficiency)
  3. Advanced scripts and multi-sig flows

๐Ÿ”— Resources


๐Ÿ‘‰ If youโ€™re building in Bitcoin, add SegWit today. Itโ€™s not optional anymore โ€” itโ€™s the bridge to the future of Bitcoin.

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