New Age: Bitcoin Experiences First Sustained Period of SegWit Dominance
Today, in the early hours of the February 28th, there was an 11 block (roughly 2 hour) period where each bitcoin block mined had more SegWit transactions than not. This event marks an inflection point for the original cryptocurrency, signaling the start of general SegWit use and acceptance on the network.
A New Era Takes Shape
Block 511270 through 511281 marks the beginning of a new chapter in bitcoin — the proper transition into a SegWit dominant chain. This development follows several cryptocurrency exchanges integrating Segregated Witness, notably Coinbase.
Though the daily average adoption is hovering around 35 percent according to segwit.party, we can expect this percentage to grow continually in the weeks ahead as more exchanges and users consolidate into SegWit-compatible wallets.
SegWit, or Segregated Witness, is a technology that allows more transactions to fit on each block by storing the signatures and transactions separately.
While increased throughput and efficiency (and it follows, lower fees) is exciting in itself, the tech also includes malleability fixes that allow for scaling solutions like the Lightning Network, and a script versioning system that will ease implementation of further network improvements, i.e. Schnorr signatures, a simpler replacement for ECDSA cryptography that will make things like transaction batching, atomic swaps, and multisig much more efficient on-chain.
Efficiency Should Explode Soon
These early SegWit-dominant blocks pushed 152 percent more SegWit transactions than legacy transactions, at an expense of only a 36 percent increase in block size.
When SegWit transactions hit consistent saturation, we can expect bounds in efficiency, even without more extreme solutions like Lightning.
Whatever your blockchain politics, this event is a milestone that will affect the entire ecosystem as the inherent friction decreases for the lingua franca of crypto finance. All trades in the ecosystem flow back to BTC, and a more liquid BTC means higher potential volume for the entire ecosystem.
What’s your take? Do you personally think this is a major turning point for the OG crypto? Sound off in the comments below.
Images via segwit.party, Popular Science