What Is SegWit?

July 18, 2019

FrederikNielsen
23

What Is SegWit?

We decided to write an article about one of the most important step in Bitcoin history, in which we will try to convey to you the idea of how scaling the Bitcoin network will affect the cost of this cryptocurrency. Yes, you understood correctly, today we will talk about the very SegWit, about which you can read now, on almost any resource related to finance. But first, let’s try to figure out what this scaling is all about.

What is the primary challenge?

At the moment, the Bitcoin network is gaining increasing popularity among the world’s population, and in this regard, the Bitcoin network faces a problem in processing transactions and their value. Because of this problem, there are very often delays in conducting transactions, which cannot please users and increase the pace of network development. In order for you to understand the essence of the problem, we give figures on processing transactions of other payment systems, such as VISA processes up to 4,000 transactions per second, PayPal up to 100 transactions, the Bitcoin network processes a paltry 3 transactions per second, which forces users to increase the amount of commission for more prompt confirmation of transactions.

SegWit’s solution

To solve this problem, a considerable number of conferences and meetings were held, where a wide range of options and versions were discussed. Among them were the versions proposed by Bitcoin Unlimited, Bitcoin XT and Bitcoin Classic – the main task is to solve the problem of network scaling. But the most interesting of all was the Peter Welle version, which he voiced at a workshop at Scaling Bitcoin in Hong Kong. It was this person who proposed to update the Bitcoin protocol, under the name SegWit. What is SegVit? Segvit is, to put it bluntly, a superstructure over the existing Bitcoin protocol, which helps to “pump” this network in order to improve network bandwidth, while not disturbing the main block chains. The main idea of this software fork, namely this phrase, it is accepted to call Segvit, is to update the block size of 1 MB, to a volume of four thousand units. This change is not the only one, because in parallel with this SW increases the network bandwidth, its security and corrects the plasticity of transactions, thanks to a change in the transaction identifier. But in order to implement this plan, developers need the support of 95% of the miners of the network, which is a barrier to the production of this software fork, because, at the moment, confirmation has been received from a little less than 40 percent of the “digital gold miners”.

Summary

The whole world is looking forward to August 1, 2017, because on that day, SegWit will be launched, which in turn can split Bitcoin into several parts, because not all miners support SegWit. Therefore, there are often options with BIP91, BIP148, and other development options. Against the background of these events, the Coinbase cryptocurrency exchange sent its user a notification in which they offered users to exchange bitcoins for fiat currencies and stop operations for 7 days, because before August 8, according to preliminary calculations, the software of the first world cryptocurrency will be held.

We cannot know exactly what will happen on the Bitcoin network in a week, but we can look at the experience of using Segvit using the example of other cryptocurrencies. So a similar procedure has already been tested on Litecoin cryptocurrency – which is most similar to it. By the way, these are the events that have recently attracted the attention of miners to digital silver. Viacoin and digibyte underwent this procedure even earlier, which led to the rapid growth of cryptocurrency data. In order not to mislead you, or to influence your decision, we simply refrain from presenting our thoughts about this event, and we will not express the opinion of highly respected experts in the field of cryptocurrencies. Therefore, as it is sung in a famous song: “Think for yourself, decide for yourself whether to have or not to have.” With you was a blog BitBetnews, see you.

Frederik Nielsen
Frederik Nielsen

I’m a freelance writer and full-time curious person. My main interests are philosophy, politics, art, culture, science, and how they’re all interlinked. When I’m not writing, I’m fronting a band, producing records, and making videos. I’m also currently working on launching a YouTube channel that will focus on culture and politics. I think blockchain technology is fascinating because of the huge potential it has to revolutionise not only the financial sector, but society as a whole.

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