Certainly, you are all familiar with the different types of cryptocurrencies, ICO’s, and general Blockchain functionality.
And you’ve probably heard about all of this SegWit business going on recently, but most likely don’t know what it all means. If I’m right, then this article is exactly what you need to help clear up some confusion.
Basically, SegWit stands for Segregated Witness, it’s a pretty important Bitcoin software update aimed at fixing a lot of serious problems. Originally, the SegWit update was supposed to solve the scalability issue that bitcoin has.
Scalability? What this means is that the bitcoin network can simply not keep up with its growing user base. Obviously, the more users there are – the greater a number of transactions that take place on the network. Despite the bitcoin ecosystem being very unique, it’s simply unable to keep up with the increasing transaction volumes. Ever send bitcoins to an exchange and it takes forever? That happens because of scalability issues.
How was SegWit supposed to fix the speed issue?
So, SegWit was supposed to fix that issue by increasing the block size limitation of the Bitcoin Blockchain. At the moment, blocks have a one megabyte limit to them. Which is definitely not enough to take care of all of the transactions that occur on the network.
Users would need to wait until their transaction was confirmed by a miner, perhaps even for a few hours, maybe days. Personally, the longest I’ve had to wait for one of my bitcoin transactions to be confirmed is around 10 hours. And that was a withdrawal from coinexchange.io, not a very good exchange platform in my opinion.
The SegWit solution was supposed to boost the bitcoin block size to around 4 megabytes, which is the maximum allowable block size. In addition to this, the Lightning Network (sidechain, discussed further below) solution was supposed to be implemented, which would improve the Blockchains network capacities by taking a big chunk of transactions off grid for faster processing.
Which is probably a good idea, right?
Some people really dont like SegWit.
Users argue that SegWit will not be able to solve bitcoins issues.
The primary argument is that an increase in the block sizes is not going to provide a long-term solution for the growing amount of bitcoin transactions and user base.
All though you might think that since the proposed idea was for the block size to go from 1 megabyte to 4 megabytes, then the transaction speeds would be 4 times faster? Well, that’s not necessarily the case. There are a lot of nitty-gritty technical details that need to be taken into account here.
Thus, a debate between two sides ensued. With one side supporting the update, while the other vehemently opposes it. Ultimately, creating an ideological and political divide. Especially on the grounds of implementing the Lightning Network solution, since it is a sidechain.
Why? Because side chains propose the idea of moving coin transactions to another system, on which all bitcoin transactions would be processed by a third party. Pretty much defeating the purpose of decentralization, which is what everyone and their mother loves about Blockchain technology.
Here’s a list of developers, businesses, other parties as well as their stance on the SegWit business.
What on earth is SegWit2x then?
SegWit2x was supposed to – increase the block sizes, modify the bitcoin software that is used by network users while implementing the SegWit2x code, known as the BTC1, and execute a hard fork, which would require everyone to upgrade their software to accommodate the new SegWit2x rules.
All of these updates could result in a few different outcomes. Such as the bitcoin rules changing, with SegWit2x rules becoming the standard, two new bitcoins forming, with the current bitcoin becoming the “legacy” BTC, and a brand new “SegWit2x” bitcoin forming. These two coins would operate under different rules from one another and would be considered to be completely unique cryptocurrencies.
However, there is a possibility that bitcoins rules would change, miners wouldn’t have to do anything, and the network would continue to operate under its current rules.
Seems like a lot of odd things could happen because SegWit2x. But, users were mostly opposed to the update because of the new “SegWit2x” bitcoin that could form as a result of the process.
However, it was announced on November 8th that the SegWit2x update would be suspended due to the large divide that was rippling through the community.
This seems like a good idea to me because there was a lot of frustration present regarding the update and especially what would follow after.
Personally, I think that a boost to the bitcoins transaction speed would be awesome. However, I also do not think it is time yet. Because while the bitcoin price is volatile and there’s a ton of money floating around it, the amount of people that use it isn’t as great as some of you might imagine. So, a fork could spook away a lot of users that aren’t entirely convinced by technology yet.
All in all, everything that has been happening to the bitcoin recently is for the greater good. All of these updates, divides, discussions, issues, they all build up towards a solution.
Which is to make the bitcoin better.