What is SegWit?
Segregated Witness. It is a upcoming update to the Bitcoin Software, to solve and fix some issues which are very serious.
SegWit is update to the Bitcoin Core, which is the most used and popular Bitcoin ref. client.
Mainly, it is solving the well known transaction malleaility in the Bitcoin Software.
Although this vector of the attack is not the most harmful to the users, it has already been exploited in several cases, highlighting the need to pick them.
However, SegWit offers a number of other advantages, and now the focus of attention has shifted from the fixation of transactional formability to the problem of bitcoin scaling. Bitcoin is currently experiencing massive scaling problems that will only get worse over time.
What is the solution of SegWit for the bitcoin scaling problem?
SegWit increases the block size of the bitcoin and allows implementation of the second-layer solutions for further improvement.
Current problems of bitcoin scalability result mainly from the insufficient block size. Successive blocks of transactions are those that make up the blockchain. The blockchain, in turn, is the ledger of all transactions that have taken place in the network so far - the heart blood of the crypto currency.
The problem here is that currently blocks have a hard-coded limit of one megabyte. This is not enough to take into account the hundreds of transactions that users are trying to send every minute.
Consequently, many of these users must wait in line until their transaction can be confirmed; Sometimes for hours or even days. As the size of the network grows, the transaction intensity continues while the block size limit remains the same, which means that the problem gets worse and worse.
The SegWit solution is twofold. First, it allows an immediate increase in the block size limit to four megabytes. There is a limitation: four MB is the absolute maximum, whereas the actual block size depends on the network conditions. It is predicted by experts to be in the range of about two to 2.1 megabytes immediately after the activation of SegWit.
Second, SegWit eliminates what was once a small problem for Bitcoin by solving transactional deformability, but a major obstacle to the implementation of second-layer solutions. One of these solutions is the proposed Lightning Network. It is expected that a massive increase in network capacity is enabled by moving most of the transactions from the blockchain for fast processing.
Why has not SegWit been activated yet?
SegWit is activated as soon as 95 percent of the network is measured in hash power signals.
If the support for a new set of rules is insufficient, there may be a contending fork where a significant portion of the network precedes and changes to a new client, but some decide to use the old one. This leads to a simultaneous existence of two cryptokrivals with different sets of rules that compete with each other for users.
Such a scenario can lead to unpredictable results and should at least have a strong negative impact on the value of both currencies. To avoid a disputed fork, the SegWit developers have set a specific rule in the software, which will only activate them when they receive almost unanimous support from the network - 95 percent.
Currently the level of support is around 32 to 33.8 percent and it has never been about it. The level of support is so low, because there is a large block of users that counteract the update on different bases.
What are the main arguments against SegWit?
The key points against SegWit can be roughly divided into three groups: technical, political and ideological.
Some have argued that SegWit in its present state will not be able to solve the problems that it promises to solve. One of the main arguments is that the block size increase proposed by the update is not nearly enough to meet the growing needs of Bitcoin's user base.
The majority of the experts seem to agree on the high technical competence of the authors of SegWit as well as the solidity of the technology itself. However, it is almost impossible for a person who is not a programmer to evaluate the authenticity of the arguments proposed by both sides.
The fact that the debate is not purely technological, but also has a political aspect, makes things complicated. A large number of people working at SegWit are also used by a company called Blockstream, whose primary product is sidechain solutions.
Some of the communities claim that this creates a conflict of interest as the developers are encouraged to impede attempts to increase the block size to artificially increase the demand for sidechain solutions such as the Lightning Network. There is no definite proof of this claim, but a large part of the community has still decided to believe in it and is therefore against SegWit.
The most important ideological argument against the update is that it does not provide scalability while preserving sufficient decentralization of the Bitcoin network. As mentioned above, SegWit solves the long-term problems with Bitcoin's inadequate transaction capacity only insofar as it enables the implementation of side-chain solutions such as the Lightning Network.
The problem that some people see here is how the side chains work. In order not to rely on the heavily clogged blockchain, they move the coins into a second layer system. There, all transactions are processed by a trustworthy third party without transmitting them over the entire network, which saves a lot of time and time.
But a trustworthy authority command is exactly what Bitcoin should remove from the money system. For some, this is an unacceptable compromise, no matter how little power the third party exercises in solutions such as the LN and others.
Who supports SegWit then?
A wide range of individuals and companies have supported SegWit anyway in the past and when it comes to enterprise software support for them.
More than 100 of the most important companies in the industry are known for planning, editing or implementing SegWit in their stores. The whole list is here.
In addition, many prominent people who are known for their work in the Bitcoin community have shown their support for SegWit on Twitter and various other platforms. Among them are Andreas Antonopoulos, Samson Mow, Charlie Lee and others.
Of course, the most direct support comes from the miners. At the time of writing, more than 33.8 percent of them signal their explicit approval from SegWit.
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