Post SegWit Review : Was it really worth fighting for?
About 4 months ago I wrote a post “What to expect post-SegWit Activation” where I predicted that SegWit would boost the performance of Bitcoin. In Crypto-land 4 months is a very long time so I thought it was about time I had a look back and review whether I got this call right.
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I suggested 2 Bitcoin metrics that were worth keeping an eye on, they were the Mempool size and the Transaction costs. My thinking was that if SegWit was activated and more transactions could be fit into a 1MB block then both of these things should come down.
This is what the Mempool Size looks like since July :-
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As you can see, despite things looking OK during September, it has continued to worsen and now is hovering around record highs.
Here is the Transaction Costs over the same period :-
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Not particularly surprising since the Mempool has continued to blow out....so have the Transaction Costs.
So has the activation of SegWit on the main Bitcoin chain been a complete failure? Well one might argue that Bitcoin adoption has exploded over the same period so we could perhaps blame Bitcoin adoption rates and increased transactions for this continued decline of Bitcoin performance. But before we do, let’s just have a quick look at how many transactions are actually using the SegWit functionality….
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Ok, so what’s going on here? We can see that after activation the number of SegWit transactions has gradually increased….up to a maximum of maybe 18% some time in October and then it has crashed, fluctuating either side of 10%. So is this a massive vote of no-confidence in SegWit? Does it mean that the SegWit Activation has been a complete failure and a waste of time?
If you recall earlier this year there was a lot of very passionate argument about SegWit and there was a faction of users who were prepared to go to the extreme measure of pushing a User Activated Soft Fork which was threatening to fork the main chain. In addition this fork threat was going to cause a wipe-out risk for those who didn’t toe the line of these extremists which meant their transactions could be lost in a blockchain re-org should things go against them.
It was such a huge issue at the time and debate was fierce. Now here we are 4 months after activation and nobody really gives a damn about it?
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You couldn’t make this stuff up. Are the people holding back on SegWit adoption to try and maximise transaction costs, thus revenue? Why signal for an update to the software if you don’t intend to use it? At the time of activation there was nearly 100% signalling support for SegWit!
So now we have a situation where SegWit is not being used, the Mempool and Transaction Costs are blowing out and making Bitcoin practically unusable as a currency. Merchants are dropping Bitcoin support because it is unviable for them….is it any wonder that people are moving into alt-coins like Bitcoin Cash, DASH, Litecoin and Ethereum. ALL of them are currently much better cryptoCURRENCIES than SegWit Bitcoin is right now.
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http://www.powerretail.com.au
https://blockchain.info
http://segwit.party
https://t3.ftcdn.net
https://shadtherackster.files.wordpress.com
Good analysis here bugged. I hadn't even thought about this, but you're right, it is a bit ridiculous that segwit is not even really being used after the fork, which was all about using segwit. I try and use Dash for moving my money around. So much cheaper.
Thanks @choogirl. I always appreciate your thoughtful comments!
I like DASH too. I think it is one of the candidates to topple BTC as the next generation king crypto in coming years. I was using ETH for a while to transfer between exchanges before the CryptoKitty fad blew out the transactions there too. More recently I've used LTC and even XRP is widely accepted now.
Lol, those stoopid cats! Although it did show that ETH has some work to do, so that's something.
I'm no expert with this sort of stuff but I just wonder.....Is it possible that all the Bitcoin developers and heavy weights have taken their eye off the ball because they are desperately working in the background to come up with a fix?
@penguinpablo did a post which got me wondering. How far are they from releasing the Lightning Network? How will it eradicate the high fee and slow transaction rates?
Food for thought!
Here's the post - https://steemit.com/bitcoin/@penguinpablo/tutorial-how-to-make-a-lightning-transaction-on-the-bitcoin-testnet
I don't think so. The short term fix is very simple. Increase block size from 1MB to 2MB. That buys enough time for this magical "Lightning Network" fix to be developed, tested and deployed.
Somewhere along the way politics got in the way of common sense.
I believe it is not so simple. Hard fork will divide community for sure. Big money was bet on bitcoin and any hard fork will bring a lot of uncertain. That is going to cost much more for bitcoin in long term.
Honestly it's gotten to the point that the blockchain tokens that weren't even built to be currencies are better currencies than bitcoin. I think the most important steps that bitcoin ever took towards adoption was the acceptance of bitcoin by vendors. That's what the community was really shooting for in the early days. No one is going to use a currency that costs more than a few dollars per transaction. Even a few dollars pretty severely limits what you are likely to use the currency on. There's a reason credit cards charge a percentage, and unless cryptocurrencies keep their transaction fees similar to what a credit card fee would be for a small-ish transaction, people aren't going to be using it to make purchases any time soon.
Indeed. It is a pretty sad state of affairs when something like Ethereum - which was never even intended to be a currency - performs better as a currency than BTC.
It is very irrational to me that BTC is valued so much as it is in it's current state.
Both the high transaction fees and the confirmation wait times are killing bitcoin. I am not sure why segwit isn't being used? There seems to be a ton of greed, short sighted greed too because this stuff is bad for bitcoin in the long run
I wish I knew.
Alongside the greed there seems to be a lot of misinformation being perpetuated about what and why Bitcoin is doing what it is. I guess that's why I refer back to charts and statistics....they don't lie so much :)
This is an interesting discussion man, i do know that the fees have certainly gone crazy.
I find it unusable and there are plenty other techos like me. I guess we are still in the minority for now o_O
Shocking really. What's a cryptocurrency if you can use it as such.
If you can't use it as a currency then it is just a speculative asset. A bit like a CryptoKitty ;)
do you know about bittrex?? can you tell me bitrex minimum withdrawal amount??
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