SegWit (short for Segregated Witness) is a protocol upgrade that changes the way data is stored. It was activated on litecoin on May 10, 2017 and on bitcoin on August 23, 2017.
Developer Pieter Wiulle first presented the idea at the Scaling Bitcoin conference in December 2015.
Many hailed it as a long-awaited solution to bitcoin’s scaling problem. The maximum block size in the main protocol is 1MB, which limits the number of transactions bitcoin can handle to around 7 per second. This would limit bitcoin’s potential growth and prevent it from becoming a usable high-volume payment system.
While the upgrade does not allow for a larger number of transactions in bitcoin’s blocks, SegWit’s original intention was to fix a bug in the bitcoin code called transaction ease. This vulnerability allowed anyone to change small details that modified the transaction id (and subsequent hash) but not the content. While not a serious problem for bitcoin, it has prevented the development of more complex features like second layer protocols and smart contracts.
SegWit immobilizes transaction flexibility by removing signature information (also known as “witness information”) and storing it outside of the underlying transaction block. With that, the signature and script can be changed without affecting the transaction id.
A side benefit that is taking on much greater importance is that, without signature information, transactions would be much less. This means more can fit in a block, and bitcoin can handle greater throughput without changing the block size.
SegWit introduced a new concept called block weight. This means that the SegWit upgrade is compatible with the previous protocol and avoids the need for a hard fork.
So SegWit does not increase the block size limit, but it allows a larger number of transactions in 1MB blocks. Limit 4 MB consists of segregated witness data, which is not technically part of the base 1MB transaction block.
Another big step taken by SegWit is that it supports the development of second layer protocols, such as the lightning network. Fixing the flexibility makes any feature based on unconfirmed transactions less risky and easier to design.
The lightning network will further enhance bitcoin’s transaction capacity by executing small, often off-chain transactions, settling on the bitcoin blockchain only when the user is ready.
SegWit activation also accelerates development work on other features such as MAST (allowing for more complex bitcoin smart contracts), Schnorr signatures (which will enable other transaction capabilities), and TumbleBit (a layer network anonymous top).
Not everyone in the bitcoin community agrees that SegWit is the solution bitcoin has been waiting for. Some believe it’s a case of kicks to the can, down the street and, at best, a temporary fix.
Resistance to SegWit was one of the factors behind the growth of bitcoin cash, a fork of the bitcoin network that chose to implement a larger block size limit instead of relying on a new transaction structure.
Despite the obvious advantages, the rollout of the upgrade is moving slowly. At pixel time, 14% of transactions used the new format (you can track progress here).
The main reason is that many wallets have yet to add SegWit support. Some big names like Trezor, Ledger, Electrum and Kraken have done so. Coinbase – the largest wallet provider in terms of transaction volume – is working on it and is expected to roll out the upgrade in early 2018. And the wallet comes bundled with bitcoin’s most popular full node implementation , Bitcoin Core, is expected to roll out SegWit in the first quarter of 2018.
With the main bitcoin code also making SegWit-friendly tweaks, this could lead to an uptick in both usage testing and additional functionality. Bitcoin Core maintains a list on its website of businesses and projects working on SegWit integration.
As more wallets upgrade, the percentage of transactions using the SegWit structure will increase and bitcoin fees will decrease as blocks contain a larger number of transactions. Furthermore, the development of lightning and similar second-layer protocols will further strengthen bitcoin’s reach and potential. This is unlikely to happen overnight – but change is an important one and represents a huge step forward.
Segwit was born for Bitcoin helps to adjust the quality of information to be stored in each block, the size of each block remains the same and makes Bitcoin transactions faster.
Segwit Bitcoin only needs a Soft Fork, not a Hard Fork and will be done quickly dividing the Bitcoin Blockchain in two.
According to Tapchibitcoin.vn
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