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What is a P2SH Address (Nested SegWit)?

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Written by UKey Wallet

Definition: This is a Bitcoin address format starting with 3, used for complex functions (like Multi-Sig) or SegWit compatibility.

Core Logic:

  • Compatibility "Wrapper" : It acts like an envelope, wrapping modern SegWit technology inside an older address format. This allows outdated wallets to send funds to it without issues.

  • Fee Compromise : Transactions are cheaper than old 1 addresses but more expensive than native bc1 addresses (the "wrapper" adds about 10% extra data).

  • Versatility : It is the standard choice for accounts requiring multiple institutional approvals (Multi-Signature).

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