The latest update to Bitcoin Core, the “open-source software that serves as a Bitcoin node”, includes improvements to network and transaction efficiency while making the “bech32” format the new default.
According to a report in Bitcoin Magazine by Wladimir J. van der Laan, the lead mainainer of Bitcoin Core, the 0.19.0 update (which was released on November 24) to Bitcoin Core includes contributions from over 100 Bitcoin developers over a six month period. The new update includes several performance upgrades and bug fixes, including the shift to default Bech32 addresses.
The Bech32 address format (BIP 173) does not make a distinction between lower and upper case letters, reducing the potential for erroneously keyed transactions. BTC addresses in the bech32 format also begin with “bc1” instead of 1 or 3.
In addition to reducing errors, bech32 addresses are also better optimized for SegWit wallets. The bech32 format improves on interoperability with SegWit, which reduces the amount of data to be transmitted on the Bitcoin network. The end result should be reduced transaction fees and improved network efficiency.
According to the Bitcoin Magazine report:
Some wallets that offer SegWit — including the Bitcoin Core wallet by default up until now — do so by 'wrapping' it into P2SH outputs (with addresses starting with a '3'). To spend bitcoin from such an address, users must reveal a piece of code — the 'redeem script' — to show that the bitcoin were really locked up in a SegWit output.
The report continues:
With the new bech32 addresses, this step can be skipped, which means that spending from a SegWit output will require a little less data to be transmitted over the Bitcoin network and included in the blockchain. This makes transactions from a bech32 output even cheaper than SegWit transactions from a P2SH output.
The 0.19.0 update also improves upon Bitcoin Core’ security, which now requires BTC nodes to establish more connections to one another in order to prevent partitioning attacks.
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