Why does Bisq claim that my "native segwit" receive addresses are "invalid"?

Question

Every time I'm transferring over the funds from Bisq to Bitcoin Core, I get the error:

Invalid address.

(Or something along those lines.)

Only after generating another receive address in Bitcoin Core, unchecking the "Generate native segwit (Bech32) address" checkbox, does it work.

Why does Bisq consider "native segwit (Bech32) addresses" (the default in Bitcoin Core) to be "invalid"? Is this some kind of internal war in the Bitcoin community where they refuse to even acknowledge the existence of this other "format"?

Every time it happens, I almost get a heart attack until I realize I forgot to uncheck that checkbox...

Answer 1

Many clients have not been updated to recognize native segwit addresses, and are unable to deal with the bech32.

There should be no real downside to sending to a non-native-segwit address, besides some minor fee increase when you spend the coins.

Answer 2

Bisq now does support extracting, withdrawing btc to Segwit addresses. They implemented this change back in Sept 2020 -> see https://github.com/bisq-network/bisq/releases/tag/v1.4.2

Part of their Release notes in that version include:

Use SegWit addresses to fund and withdraw from your Bisq wallet

NOTE: Although it's now finally possible to transfer out of Bisq to Bech32 wallets, do not expect any fee savings just yet, because all Bisq trading transactions still happen against P2PKH addresses. This change will be shipped in one of the next releases.