All deposits and withdrawals on Crypto Facilities use P2SH-P2WPKH addresses to benefit from the segregated witness (SegWit) protocol upgrade that was activated in 2017.
SegWit offers numerous benefits:
- Protection from transaction malleability
- Smaller individual transaction sizes
- Larger block capacity on network
In order to avoid backwards compatibility issues for wallets and exchanges that do not support bech32 addresses, we use the familiar 3-prefix address (P2SH) base58 encoded version of SegWit.
While this misses out on some of the additional benefits that native P2WPKH addresses offer -- such as collision resistance, checksum features, and unambiguous signaling of SegWit use -- we believe it strikes the right balance in the interests of users.
Note that all users will now see their Bitcoin deposit address prefixed with "3" instead of "1", as below: