Bitcoin Core developer Pieter Wuille has released Segregated Witness causing quite a stir in the industry. Segregated witness is the first step in allowing Bitcoin to scale by fitting more transactions in the current 1MB block size limit. It brings added benefits by removing the part of each Bitcoin transaction carrying the digital signature, instead putting them beside the blockchain through its coding.
Segregated Witness Arrives
The release of Segregated Witness (SegWit) now steps up the Core side of the block size debate by rolling out a scaling solution. Bitcoin Classic normally integrates core updates while advocating for at least a 2 MB base block size. It remains to be seen at this time if they will incorporate the SegWit commit.
Another benefit to the new release is the transaction malleability hole has now been closed. While not exploited often, having this bug fixed will give even more security to Bitcoin. For SegWit to become fully functional, several things need to happen such as 95% of miners and pools need to adopt it. Also wallets and wallet providers will need to update to get the full benefit of SegWit.
But since it is a soft fork, it will still be backwards compatible. This compatibility will not force users to update while at the same time allowing SegWit updated wallets and services to see older version transactions and vice versa. While SegWit has performed well on the Testnet, real world results will show is true efficacy.
Bitcoin Miners Choice
The struggle is now to convince 95% of miners and pools to adopt it for it to take effect. This is a contentious area as at different times different miners, pools and ASIC manufacturers have supported several different proposals in the last several months.
Currently, the Bitcoin Core side has most of the miners and pools aligned with Segwit after a marathon meeting between many of the Core devs, mining pools and manufacturers. Many still would like to see a path to larger base blocks, which would allow Bitcoin to scale further in terms of total transactions per block. With Segwit adopted and a hard fork later, larger base blocks could potentially allow for a lot more transactions per block. It remains to be seen now that Segwit is in the wild if it is adopted quickly by miners and pools.
The creator of SegWit, Pieter Wuille Ph.D., has been a Core dev since 2011 after his career as a Site Reliability Engineer at Google. He has been one of the most prolific developers in terms of commits to the Bitcoin codebase including the invention of Bitcoin’s Hierarchical Deterministic (HD) wallets.
SegWit is a step forward and its release has possibly played a role in the current Bitcoin price rise as more people gain confidence that the block size issue may soon be resolved. If the miners adopt this solution, Bitcoin could very well experience another price rise in the run up to July’s block reward halving.
What are your thoughts on Segregated Witness and its release, do you think it will be adopted?
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