P2SH-P2WSH (Nested SegWit Script)

P2SH-P2WSH - sometimes called "nested SegWit script" or "P2SH-wrapped P2WSH" - is a P2WSH output wrapped inside a P2SH outer layer. The address looks legacy (starts with 3), but the spend follows SegWit rules: the redeem script just commits to a P2WSH scriptPubKey, and the actual witness data sits outside the legacy transaction structure.

It existed for one reason: backwards compatibility during the SegWit rollout in 2017-2018.

When SegWit activated in August 2017, most wallets and exchanges did not yet support sending to native SegWit addresses (bc1q...). They did know how to send to 3... addresses (P2SH had been around since 2012, via BIP-16). To let users adopt SegWit before the rest of the ecosystem caught up, wallets generated P2SH-P2WSH addresses: legacy-looking on the outside, SegWit on the inside. Senders saw a familiar 3... address; the receiver got SegWit's fee discount and malleability fix.

How the wrapping works:

• Receive. The address is the hash of a short redeem script: OP_0 <32-byte-script-hash>, which is itself a P2WSH scriptPubKey.
• Spend. The input reveals that redeem script (P2SH semantics), and the actual spending script plus signatures live in the witness stack (SegWit semantics).

In practice it is a P2WSH spend with one extra wrapping layer. You pay the bytes for the P2SH wrapper but get most of the SegWit benefits inside.

Where you would see it:

• Wallets generated between mid-2017 and ~2019 that wanted SegWit benefits without breaking sender compatibility
• Multisig setups from that era (Casa, Unchained, BitGo, and similar) often defaulted to P2SH-P2WSH
• Hardware wallets that supported SegWit before the ecosystem normalized on bc1q

Modern picture:

• New wallets default to native SegWit (bc1q...) or Taproot (bc1p...). No reason to nest anymore.
• Existing P2SH-P2WSH UTXOs are still spendable forever; nothing about the format expired.
• If you hold one, sweeping it to a native SegWit or Taproot address on a fee-light day costs you a transaction but pays back in lower future spend costs.

The same pattern exists for single-sig: P2SH-wrapped P2WPKH gives a 3... address that spends under SegWit. Same rationale, same modern story.