On August 23, SegWit was activated around block 481,824. Marking a historic moment for Bitcoin and its future.
There has been a lot of drama over the last few weeks of whether Bitcoin should be updated to SegWit or should it stay as it is.
Now, that SegWit is activated, users will finally be able to take an advantage of this long-promised technology. The transactions will become faster and it removes transaction malleability, a bug that’s been the primary roadblock for many Bitcoin projects.
If you’re still out of the loop, below you will find a reminder of what’s SegWit and what does it mean for Bitcoin.
What Is SegWit
Bitcoin has been present on the market for almost 10 years, during which it became extremely popular.
The network was designed in a way that no updates can be done, without reaching the majority of consent. So you can imagine how difficult it could be to get 95% of the users to agree on something and implement that change.
Hence, Bitcoin has been going back and forth until it reached the unbearable level of transactions taking up to 5 hours for a confirmation from miners. Obviously, such an advanced technology like blockchain cannot keep on going like this and fall behind Visa or MasterCard.
So a group of developers came up with a solution called Segregated Witness (SegWit). This fancy name relates to the block capacity and processing transactions.
If you’re at least a bit familiar with Bitcoin, then you would know how processing transaction works. Once you send cryptocurrency to another person, it enters the public ledger and awaits the miner confirmation.
The transaction is a block which consists of your signature (private key) and the public address of the recipient. This data is currently locked in a 1MB block, and with so many transactions being requested throughout the day, there’s simply not enough space for all the blocks to fit in the network.
Hence, the idea of SegWit. The update would take some of the data from a 1MB block and store in a separate, extended block. It would automatically release the space on blockchain network and speed up the transaction process.
So, that’s what SegWit would do – increase the transaction speed and solve the malleability issue the network had for years.
While the majority of developers expressed their support for SegWit., and it has been locked in in August this year, there were different ideas on how to improve the network more drastically, and for longer.
Bitcoin Continuing Disagreement
Even though SegWit has been activated, some are still not convinced it was a good idea.
The political debate inside the Bitcoin community has already caused a hard fork of the Bitcoin blockchain and creating a new version of the coin – Bitcoin Cash. The new altcoin eliminated SegWit entirely and works with 8MB blocks.
And that’s not the end of the debate. Some agree with neither of these versions of Bitcoin and are planning another hard fork in November 2017.
The third Bitcoin could keep the 1MB block size, with SegWit, and compete with the other two over which Bitcoin should be considered as the original one.
After the news came through, that SegWit is activated, Bitcoin price went up again. Over the last few weeks, it has reached an all-time peak of over $4,000 and it will jump even higher after the last upgrade stage in November.
While there’s a lot of questions that cannot be answered yet around the new era for Bitcoin, there’s one thing we know for sure. We are one step closer of Bitcoin getting a long-awaited upgrade and going back to its original glory.
What do you think will be the next step for Bitcoin? Let us know in the comments below!