Today we are going to talk about Segwit?, So what is Segwit? Good question! You’ll know the complete answer to it in just a few minutes! And you automatically pick up the answers to many more questions! So are you ready? Let’s start. Let’s go!
- 1 What is a Segregated Witness (SegWit)?
- 2 What is a Segregated Witness (SegWit)?
- 3 How does a SegWit work?
- 4 The advantages of SegWit
- 5 Does SegWit also have drawbacks?
What is a Segregated Witness (SegWit)?
Segregated Witness is a technique associated with blockchain and crypto. If you’re in this world, you’ve probably come across the term several times. Or else you have come across the abbreviation of this term: SegWit. But what exactly is a Segregated Witness (SegWit) ? We explain it to you.
What is a Segregated Witness (SegWit)?
For years we have heard that there is a disadvantage to the blockchain of certain crypto coins. That problem is scalability. Bitcoin , for example, also suffers from this. SegWit solves this problem precisely. That’s not the only advantages a SegWit has. We will be happy to tell you more about this later in this article. Let’s first tell you what a SegWit is.
When Pieter Wuille came up with SegWit in 2015, he did it so that Bitcoin could process more transactions and faster. A SegWit does this by changing the structure of the data in the new block. This makes the blocks a lot smaller, so that more transactions fit in a block.
Since 2017, Bitcoin has officially switched to using SegWit. Unfortunately, this did not go without a hitch. Many miners therefore do not use SegWit yet. They simply refuse because of the disadvantages that this technique has.
How does a SegWit work?
Normally, the digital signature uses about 60% of the available space in a block. And that happens when the signature is in the middle of the data. Because SegWit moves the digital signatures to the end of the data, suddenly a lot more space remains. There is a lot less data linked to the transaction,
Before Bitcoin used SegWit, there could be about 1MB of data in a block. This created a large queue. Because if more data came and the limit had already been reached, these transactions would be queued. We also call this queue the mempool.
It often took a lot of time before the transaction was completed. Since Bitcoin uses SegWit, they can put about 4 times as many transactions in a block, while that is actually not quite the case. SegWit uses a mathematical trick that looks at the weight of a block. And therefore 4MB of data fits in a Bitcoin block.
Any blockchain could switch to SegWit. All they have to do is create a soft fork . In this way they can easily switch the blockchain to the SegWit. That is exactly what Bitcoin has done.
The advantages of SegWit
We would come back to the benefits of a Segregated Witness. The main advantage is that it increases the capacity of a block, as we already mentioned. SegWit allows 4 times as much data to fit in a block than when no SegWit is used. There are even more benefits…
Transaction costs are lower
Because more transactions fit in a block, the costs per transaction are a lot lower. That makes sense, because there are more people who pay for the transaction. As a result, the total amount is reached much faster.
For a Bitcoin transaction you now pay an average of $1 per transaction, while this used to be about $30 per transaction (before SegWit was used).
Since Bitcoin uses SegWit, it suffers less from bugs. In the past, it happened quite often that there was a bug that prevented a transaction from going through. The transaction was then simply canceled and users had to retry the transaction. And they couldn’t do anything about it themselves. SegWi has solved this problem for Bitcoin. So a nice addition!
Less low queue
The queue of cryptocurrencies using SegWit is shorter than before. This is because more transactions fit in a block, so that it occurs less often that a transaction is placed in the mempool. This makes crypto coins that use SegWit a lot more user-friendly. This will also ensure that more people use Bitcoin when they want to be able to perform a transaction quickly.
Bitcoin almost never reaches 4MB of transaction data. Transactions will therefore never actually end up in the mempool.
More options for developers
Because more transactions can be processed and Bitcoin is therefore more scalable, more developers can also use this blockchain. In this case, the Bitcoin blockchain becomes a lot more accessible for these developers. And that means that new techniques and solutions will also be introduced. The more developers will develop applications for the Bitcoin blockchain, the better we can use blockchain in our daily lives.
Does SegWit also have drawbacks?
Everything has its drawbacks as well. Of course, that also applies to SegWit. That is why we are happy to tell you what the disadvantages of the Segregated Witness are.
It’s a short term solution
There are several Bitcoin developers who believe that SegWit is just a short-term solution to a long-term problem. According to them, the protocol does not do enough to solve the problem of scalability. They say there needs to be a much bigger change to completely solve the problem.
Not every node uses SegWit
Not all nodes use SegWit yet. Six months after SegWit entered Bitcoin, only 14% of transactions were still using SegWit. This is because many miners do not find SegWit a nice technique. They get a lower reward when they use SegWit. They also have to use the witness-data sidechain, for which they receive no reward at all. More work for a lower pay!
It causes more disagreement
There is often a lot of disagreement in the Bitcoin community. This disagreement sometimes even leads to the creation of a new blockchain ( hard fork ). Just think of Bitcoin Cash . That is why many people would rather not have seen SegWit in the Bitcoin blockchain.
Thanh Lanh Tran(1989) is Chief Editor from BitcoinUSD.com