Charlie Lee:

Charlie Lee: “People Don’t Realize What Segwit Is”

Litecoin seems to be on the path towards adopting Segwit, the proposed soft fork (and malleability solution) by the Bitcoin core development team. But there seems to be confusion among users about what exactly the soft fork is.

Also Read: Litecoin Faces a (Soft) Fork in the Road

Charlie Lee: "People Don't Realize What Segwit Is"

Since Litecoin is based on the Bitcoin codebase, it also has the choice to adopt Segwit, and founder Charlie Lee believes this will be the case. With Segwit, he tells, the Litecoin community could add new technologies like confidential transactions and certain secure signature algorithms, as well as the off-chain Lightning Network. But, he’s noticed one trend in the discussion about Segwit. Apparently, some people don’t really get it.

“People don’t realize what Segwit is,” Mr. Lee tells “The most common negatives about Segwit is that Litecoin does not have a scaling problem. People don’t realize that the main reason for Segwit is to fix the transaction malleability problem. A scaling bump is just a side benefit of it.”

Not a Vote

Another source of misunderstanding is the role of miners, which is generally to process transactions and secure a cryptocurrency, in Segwit. 

In a recent AMA on 8BTC, Mr. Lee answered questions from Chinese-speaking Bitcoiners. Readers continually referenced a “vote” which would signal or show support Segwit. He took the opportunity to amend their understanding.

“Miners are not asked to vote,” Mr. Lee explained. “They are asked to signal for when they are ready to support a new feature. Signaling is a way to coordinate between the miners. The users decide whether or not to accept this new feature.”

He compares the scenario to the Byzantine General’s problem. “The commander wants the generals to attack,” he shared in the AMA. “If the general is ready to attack, he raises his flag to signal that he’s ready. Once 75% of the generals have their flags up, they start the attack. And the other 25% will see that and quickly get ready to attack also. The generals (or miners in this case) are just signaling that they are ready. It’s the commander (or users of Litecoin) that really decides whether or not to attack. And in this example, each general can decide not to signal and effectively block the attack.”

If the majority of the generals decide to not signal, the commander has a few options. “He can get new generals or he can just tell the signaling generals to go ahead and attack,” says Mr. Lee, who serves as Coinbase’s Director of Engineering. “This makes the battle a bit more risky, but it may have to be done.”

In this example, the developers do not act as the commander. The users do. “So as developers, we need to see if the economic majority of Litecoin users want Segwit,” he says. “From what I am seeing today, the support is overwhelmingly in favor. So if it comes to that, we will have to decide what drastic measures to take to add Segwit to the protocol. But we are not close to that point yet.”

Mr. Lee believes there is a “general confusion” that Segwit signaling represents a vote per se. “It’s more of a signal that Litecoin miners are ready to support new things added to the protocol. In the end it’s the users or the economic nodes that decide if Litecoin should upgrade it’s protocol.”

Charlie Lee: People Don't Realize What Segwit Is
Segwit Signaling at

“Segwit is a Great Feature”

“Segwit is a great feature that fixes many different problems including transaction malleability,” Coinbase’s Director of Engineering told “And it can be done with a soft fork. It’s basically a win, win, win solution and practically a no-brainer.” In a way, Litecoin is acting as an in-production laboratory for Bitcoin, as Mr. Lee explains.

“Bitcoin users who are unsure about Segwit can see it in action on a live network transacting real value,” he says “That could help boost confidence and help get Segwit adopted on Bitcoin also.”

What are your thoughts about Litecoin’s decision to soft fork Segwit? Will this be good or a bad thing for the cryptocurrency?

Images courtesy of Shutterstock, Twitter

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  • Velzen Jewellery

    SegWit is short for Segregated Witness. Bitcoin’s poison pill, developed by dipshits for a profit-driven company created to control #Bitcoin.

    • Patrick Miller

      It is a transaction malleability fix. Figuring out how to do it with a soft fork was brilliant. It also happens to allow a scaling increase and new features. You are just repeating FUD

      • Velzen Jewellery

        Ok I Get it (FUD) But I was The same i beleevde that SegWit was good thing But i lurnt that it isent good at all Miners will loose pawer over bitcoin fees and SegWit will gane ases to all of the transakchens and of chain it will open a big operchunetiy for hakers + by centerlizing BTC – SegWit ) eny body What wantd to controol Bitcoin will.

        • Patrick Miller

          It has nothing to do with control. You have been tricked. SegWit transactions are on-chain transactions. You can still do both legacy Bitcoin transactions and SegWit transactions. There’s wallets that already support SegWit. Also, you are confusing the Lightning Network with SegWit. They are NOT the same. Lightning Networks are also decentralized. What you are saying is simply not true.

    • SandwichOfEarl

      Segwit was developed by the Core team, not a company.

      • Velzen Jewellery

        Core team is a Company!

        • Patrick Miller

          No, it’s not. You are completely wrong. This is not meant to offend you, just informing you that you are wrong.

        • SandwichOfEarl

          Incorrect. Some members work for certain companies, but the Core team itself is not a company.

    • wustenfuchs

      more FUD please.

  • Jean-Claude Morin

    SegWit is a huge hack to solve problem that could be fix in a cleaner hard-fork way. Some argue that soft-fork is safer but I disagree. It’s better to break compatibility and have everyone upgrading to a new protocol than hacking and leave old client pretend everything is normal while they don’t understand new transactions and can’t send to SegWit addresses.

    • earonesty

      If u hard forked, you would still need segwit. No better solution to chaining unconfirmed transactions

      • Jean-Claude Morin

        How SegWit help with “chaining unconfirmed transactions” ? If hard fork occured, the block size can also increase and process unconfirmed transactions as we did it for the last 8 years without any problems.

        • Patrick Miller

          He’s talking a out the transaction malleability fix. It’s absolutely essential for bitcoins future, but you don’t really care cause all you want is your unlimited blocks and you don’t care about wallets, or decentralized exchange, or payment channels, or anything cool. You just want your bigger blocks and are willing to stall the network in a fit of rage along with Roger Ver.

    • Mike

      Jean-Claude, your position is based on misinformation. Yes, a hard-fork would “break compatibility” with those who do not follow the hard fork. That’s the problem with hard-forks, it renders adopters incompatible with non-adopters. The proposed soft-fork to implement SegWit provides backward compatibility, so users who have not upgraded to Segwit can still send to SegWit addresses, and vice-versa. That’s the point of a soft-fork.

      • Jean-Claude Morin

        Yeap and I think it’s better to force everyone to upgrade if the majority (longest chain) do an upgrade. It’s the way it was designed, it’s the way it was intended by Satoshi, it’s what I signed for when I’ve first joined bitcoin many years ago. Non-adopters SegWit would be unable to received or send funds from SegWit address… I could see problem here. Better have you client stop working, updating and go forward.

        • SandwichOfEarl

          Like mike said, your position seems to be based on misinformation. A non-segwit adopter CAN receive funds from a segwit address. Therefore, that isn’t a reasonable justification for doing a hard-fork.

        • Patrick Miller

          The Bitcoin you signed up for years ago looks very different from Bitcoin today if you have followed the codebase. Why are you so scared of a new transaction type? Many wallets, exchanges, block explorers already support it. And you can still use legacy format. Seriously you are grasping for straws and most of them are mythical

        • Mike

          “I think it’s better to force everyone to upgrade”

          That’s a fascist attitude, the inverse of the voluntary participation system Satoshi intended and designed.

          “Non-adopters SegWit would be unable to received or send funds from SegWit address…”

          Who ever told you that lied to you. Do not be gullible. Do not trust, verify.

    • Steffen Søborg

      Holy shit where are you getting this from? What are you smoking?

      • Jean-Claude Morin

        The SegWit address format is not recognized as a valid address for older client.

        • That’s wrong. Old wallets can send to SegWit addresses because you can support SegWit in P2SH addresses which all wallets support. And new wallets can still send to old wallets. No need for FUD.

  • SandwichOfEarl

    Most people want more on-chain transaction capacity, and segwit gives us that by increasing the number of possible on-chain transactions by a factor of 2 to 3 while also fixing other very important issues such as transaction malleability, the quadratic hashing problem, and increased P2SH security. Once these are solved, then it becomes safer to do simple blocksize increases.