What is Segregated Witness (SegWit)?


What is Segregated Witness (SegWit)?

Recently, Bitcoin reached a crucial and technical milestone, locking in Segregated Witness (SegWit). This milestone will offer a much-anticipated transaction capacity boost and in the long term, create opportunities for more important scaling technologies. 

However, the idea was much contested before it was finally implemented. It won grassroots support from users that made an effort to push it through but attracted critics in the process, splitting from Bitcoin and creating a new digital currency. 

What is expected to happen when the code finally goes live? Since Litecoin (which many believe is a “fork of Bitcoin’s code”) has implemented SegWit, it can also be a test platform for SegWit and offer a real world insight into the adoption hurdles. 

According to the people close to the project, the following are the results.

SegWit has not brought on any issues to the Litecoin network. This is a point to note given the amount of controversy this change has raised within the Bitcoin ecosystem. 

Some critics said that SegWit was too complicated and it would put the whole network at risk—like miners stealing coins from some types of addresses. This claim was, nonetheless, tested on Litecoin when one user created a Litecoin “bounty” worth $1 million using a SegWit address and attached a note that read “Let’s see if SegWit is ‘anyone-can-spend’ or not.” Up until now, not one person has claimed Litecoin in the contract.

Litecoin Foundation directors, Franklyn Richards and Xinxi Wang, have admitted that they have not had many SegWit transactions to date.  However, these sentiments did not have precise measurements.

A computer science researcher at University of Freiburg, Jochen Hoenicke, had this to say about the measurement challenges, “while you can label a transaction a SegWit transaction if it is sent from a SegWit enabled wallet, you cannot if the transaction is only sent to a SegWit enabled wallet.”

When Hoenicke compiled a list of all Litecoin Segwit transactions, 100 out of 10,000 transactions in a day are SegWit transactions.

In addition to Heonicke noticing the list is incomplete owing to the discrepancy in measuring the transactions, he recognized a particular trend. 

“The number is rising as support increases,” he stated, pointing to Trezor’s announcement that it was going to make SegWit its default transaction type. From there, he said, Litecoin SegWit transactions per day almost doubled. 

As Litecoin wallets start supporting the code change, SegWit transactions keep rising. More wallets, like LoafWallet, are moving towards a SegWit upgrade. 

Most Bitcoin wallets have already shown their support for SegWit because they have been eagerly waiting for the change and so Bitcoin is likely to see more need for this feature. 

There is a bug in Ethereum-LTC, a mobile Litecoin wallet, which leads to old versions of the software “breaking” when an investor sends a SegWit transaction to the wallet. Litecoin is still in the process of incorporating a new address type, and some users may need to convert between the two types. 

Although these issues are only being encountered by individual users and businesses, the bad user experience can arouse discontent in the Bitcoin community.

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