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

This content originally appeared on DEV Community and was authored by 이관호(Gwanho LEE)

Why This Post?

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

• Higher fees
• Slower confirmations
• No Lightning Network 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, I’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 you’re building wallets, apps, or just curious about Bitcoin internals, this is your practical roadmap to SegWit.

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 “heavy” parts don’t clog up the main block.

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?	Yes	No
Fees	Higher	~35% lower

That’s the practical win: less bytes = less fees = happier users.

Implementing SegWit in Rust

1. Address Generation

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

// SegWit (bech32)
let segwit = Address::p2wpkh(&compressed, Network::Testnet);

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,
)?;

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;

SegWit inputs get a 75% discount in size → lower fees.

Real-World Results

After adding SegWit:

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

This wasn’t just an optimization — it was a gateway to future Bitcoin features.

What’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

Resources

• BIP 141: Segregated Witness
• BIP 173: Bech32 Addresses
• Bitcoin Core Docs
• My Wallet Implementation (GitHub)

If you’re building in Bitcoin, add SegWit today. It’s not optional anymore — it’s the bridge to the future of Bitcoin.

This content originally appeared on DEV Community and was authored by 이관호(Gwanho LEE)