Electrum, our personal favorite Bitcoin desktop wallet, just released the latest version of their software! Version 3.0 (dubbed "Uncanny Valley") includes SegWit Support (with all-new SegWit addresses) and lock-timed transactions (a method to stop fork replay attacks). Read on to learn all about it!
Electrum 3.0 includes full support for Segregated Witness. You can now create your own SegWit-supported wallet using the New tool (Wallet Creation Wizard), with addresses that look like this:
bech32 addresses fully support SegWit, following the standard set by BIP 173. However, BIP 173 is still a draft, so Electrum adds:
You should keep a non-segwit wallet in order to be
able to receive bitcoins during the transition period. If BIP173
ends up being rejected or substantially modified, your wallet
may have to be restored from seed. This will not affect funds
sent to bech32 addresses, and it will not affect the capacity of
Electrum to spend these funds.
Segregated Witness provides access to faster confirmations, lower fees, and other exciting features. Try using SegWit transactions and addresses with Electrum!
Electrum 3.0 now includes lock-timed transactions, such that the lock time field is automatically set to the current block. This provides for a level of automatic replay protection and helps deter against replay attacks, if you choose to use it properly.
Let's say that Bitcoin (BTC) is the main chain (with the highest hashpower) and is currently at block 600,000 while Bitcoin Example (BEX, just an example) is a fork without replay protection, which is currently at block 599,500 (500 blocks behind BTC).
Lock-times in transactions basically tell miners that the transaction cannot be included in the blockchain until a certain block has been reached.
For example, if I broadcast a transaction on the BTC blockchain with a lock-time of 600,100 it can't be confirmed for another 100 blocks, since the current block number is 600,000.
Here are the steps to transact BTC without worrying about replay attacks on the BEX chain, even though BEX doesn't have replay protection:
T with a lock-time of 600,000 (Electrum will automatically apply the locktime)T, and wait for it to be confirmed on the blockchainT is confirmed, create a transaction U that spends the same coins from T on the BEX blockchain (or the other chain). U should send the coins to another address (probably owned by yourself)U gets confirmed on the BEX blockchain before block 600,000, your coins are replay-protected.The reason that this is highly likely to work is because BTC is so ahead of BEX (500 blocks). Transaction T cannot be spent on BEX for another 500 blocks due to this gap, and we take advantage of that by getting in another transaction on BEX before a replay of T can catch up.
Electrum 3.0 is an exciting update to the premier Bitcoin light client, and the addition of SegWit provides access to more opportunities for users. You can download the latest version here, and if you aren't sure what Electrum is or how it works, make sure to check out this series on why Electrum is the best light Bitcoin wallet!
Thanks for reading,
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