Friday, December 9, 2022

Bitcoin Gets SegWit. Is the Great Scaling Debate Now Over?

Bitcoin Gets SegWit. Is the Great Scaling Debate Now Over?

It’s official: Bitcoin has locked in SegWit. The long-awaited first protocol upgrade to address transaction capacity will now become functional in two weeks.

Also read:ย BTC Price Breaks More Records, as Bitcoin Cash Rises Again

For Bitcoin trivia buffs, block #479707 on 8th August 2017 marked the exact point at which miner support reached the required level, within the required time. The official signaling period doesn’t actually end for another hundred blocks or so, but it doesn’t matter now.

Time for SegWit to Prove Itself

Now that SegWit will definitely activate, Bitcoin miners and services will have to get busy upgrading their software to handle the change. Although BIP 141 (which implements the change) is not a hard-fork, miners will reject any future blocks that do not comply after activation.

Meanwhile, the UASF campaign continues to take credit for the upgrade. They’re technically correct, having forced Bitcoin miners’ hands by threatening a blockchain-split led by a minority of users if they didn’t introduce SegWit themselves.

But Will the ‘2x’ Part of ‘SegWit2x’ Ever Happen?

Large miners and prominent Bitcoin companies (such as Bitmain and Coinbase) only agreed to support segregated witness if it came bundled with a promise to consider a block size increase to 2MB a few months later.

The latter condition is the more controversial part of “SegWit2x” — although it’s part of the official roadmap, it’s not a guarantee. Increasing the block size does require a hard-fork, which a majority of miners will need to support for it to activate.

Many remain steadfast in their opposition to the block size increase. Conversely, on-chain scaling proponents are still campaigning for larger blocks, and claim SegWit represents a more radical change to Bitcoin’s nature.

The years-long disagreements over scaling solutions is now either over, or just heating up — depending on who you follow.

November will reveal just how much of the Bitcoin economy still favors larger transaction blocks. This will likely depend on how well SegWit alleviates network congestion between now and then.

SegWit was first introduced by Bitcoin Core developer and Blockstream co-founder Peter Wuille, at the Scaling Bitcoin Hong Kong conference in 2015. Wuille proposed the upgrade as a means to increase Bitcoin’s transaction capacity without altering the block size itself.

It comes with a promise to solve Bitcoin’s “transaction malleability” issue and allow for second-layer payment networks for daily purchases and micro-transactions, which later settle on the main blockchain.

Is SegWit the answer to all Bitcoin’s problems? Let’s hear your thoughts.

Images via Pixabay

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