What is SegWit?
Segregated Witness (SegWit) is a proposed update to the Bitcoin blockchain by the Bitcoin Core development team.
Originally, the update was aimed to address a weak spot in Bitcoin software which has been exploited in several instances already and therefore, highlighted the need for a patch. Fortunately, SegWit offers a range of other advantages which include a possible solution to Bitcoin scaling problem.
The scaling problem is due to an insufficient block size of 1MB which is not enough for the number of transactions currently submitted on the blockchain.
Consequently, the transactions can be delayed for hours or even days. A transaction can jump the queue if a higher transaction fee is paid which is resulting in high average transaction fees. As the adoption of Bitcoin grows the problem is continuously getting worse.
The SegWit is providing solution to the following challenges in the network;
- Resolve the weak spot in the Bitcoin software
- Increase of the block size limit to an absolute maximum of 4 MB. The actual block size will depend on the network conditions. It is predicted by experts to be in the range of about two to 2.1 megabytes immediately after SegWit’s activation.
- Remove the barrier to the implementation of second-layer solutions (side-chains) like the proposed Lightning Network. Second-layer solutions remove the bulk of the transactions off the blockchain to a side-chain.
For SegWit to be activated the support of 95% of the network is needed (measured in Hash power).
If the support is insufficient, it may result in a split or fork where a part of the network switch to SegWit while others keep using the old version of the software. It will lead to the existence of two cryptocurrencies with different sets of rules. Currently, the level of support for SegWit is around 30% due to a large block of users opposing the update.
The arguments against Segwit are:
- The block size increase is not enough to satisfy the growing needs of Bitcoin’s user base.
- Others see a hidden agenda as a large number of people working on SegWit are also employed by a company called Blockstream, whose primary product is side-chain solutions.
- Because a side-chain’s transaction will be verified by a trusted third party it is an unacceptable compromise because this is what the blockchain is supposed to eliminate.
Many prominent individuals known for their work in the Bitcoin community have made clear their support for SegWit.
Among them are Andreas Antonopoulos, Samson Mow, Charlie Lee and others. Of course, the most direct support needs to come from the miners. At the time of writing the support was about 31%.
Source:
https://cointelegraph.com/explained/segwit-explained
Bitcoin will eventually be exchanged for another currency and blockchain system. I see EOS as both ETH and BTC future contender. Moreover I don't see BTC has a safe future. Current price status is pumped due to being a gateway currency.
It is possible, but Bitcoin is still digital gold. ETH does not have a limited supply like BTC. Even if it is used more than BTC, its value is limited due to its inflationary character.
Thanks for sharing, I was wondering what the potential changes to the block size were going to be. I'm not exactly sure some people being associated with a business should be a real reason to not support something, clearly those people believe in it enough to have a business related...I'll have to look more into this though.
I personally believe in the Core Team. They have proved themselves to be reliable and deliver very high-quality work. This said I don't like the idea of side-chains and a trusted third party.
Let see how this play out.
Yeah, anything that involves verification by a third party I struggle to get behind. The whole purpose of the blockchain is decentralization.