Bitcoin is the first decentralized digital currency that has seen immense growth in its value and adoption rate. Since its birth, it has undergone several major updates. The last update, named SegWit or Segregated Witness, has helped in speeding up transactions and reducing fees. In this article, we will explain what is SegWit and its significance.

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What is SegWit?

SegWit is a term used to describe a block size update in the Bitcoin network. Unlike a simple increase in the size of a block, SegWit removes the parts of the block that are related to the transaction signatures. This update makes space for more transactions to be included in one block and helps in a faster confirmation time.

What does SegWit do?

With SegWit, signatures of a transaction are stored in a new field called a witness. So, with the update, a transaction can be signed with two signatures instead of three. This process reduces the size of a transaction from ~194 bytes to ~77 bytes. The update also lets the network process more than one signature per transaction. The larger the transaction volume, the faster the confirmation time.

Why is SegWit needed?

There are certain scenarios where the transaction size is a concern. For example, if a lot of people buy something in a certain period of time, the size of the transaction is going to be huge. This can be an issue because more bandwidth is needed to store the data. If a transaction is too big, it can get stuck in the network and not confirmed. This can be annoying for the sender as well as the receiver.

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How to enable SegWit on your Bitcoin account

Before you start SegWit transactions, you will have to activate the update on your Bitcoin account. To do so, log in to your account and navigate to Settings > SegWit. You will also have to make sure that there is at least one Bitcoin account in your name in order to enable the update. After activation, you will have to send one or more transactions with a fee of at least 20 BTC. Your transaction will then benefit, which will help confirm the transaction faster.

Conclusion

Bitcoin is the most popular cryptocurrency in the world. It is also known to have a low transaction fee. However, this doesn’t mean that it has low fees all the time. It is possible that the fees are low when there aren’t many transactions. SegWit is one of the updates that have made Bitcoin faster and more reliable. With this update, you can send and receive more transactions at once.

Thank You!

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