- August 25, 2017
- Posted by: Bitcoin Center NYC
- Category: The Latest Bitcoin News
As of block 481,824, Bitcoin received its largest protocol upgrade yet. Segregated Witness, or SegWit for short, is the controversial, long awaited modification to the Bitcoin protocol that is effectively increasing the blocksize by about double.
SegWit rearranges the blocks that store Bitcoin transaction data in such a way that it is expected that the individual blocks will be able to hold twice as many transactions, and up to four times as many depending on transaction size. This boosts block space while remaining compatible with older versions of Bitcoin software.
Moreover, SegWit removes transaction malleability, which is seen as a bug that has been holding back the Bitcoin protocol for many projects that leverage the technology. Furthermore, SegWit opens the door for other Bitcoin protocol changes/layers (such as the Lightning Network) that is also seen as a massive upgrade by some.
Although Bitcoin just went through a chain split, the one that created BitcoinCash, as well as a soft fork, the one bringing about SegWit, the price of Bitcoin has remained above $4000, and is poised to go even higher if Litecoin is any judge of how SegWit will affect a coin.
Litecoin activated SegWit near the end of march, and doubled in price within 5 days. By the end of April, just a month later, the price tripled. This sounds absurd that Bitcoin that is currently priced above $4,200 could go up as much as 3x in the short future, however it is directly in line with a legendary Bitcoin trader’s prediction for the future of Bitcoin.
For more on the predictions of this trader, ‘masterluc’, check out our post that goes into more depth about them.
Although this upgrade to Bitcoin is a welcome change to most, more than 90% of the miners needed to signal for SegWit for it to be activated, there are some that vocally opposed this change. Whether that be because they are adverse to change or they have valid criticisms about this is rather unimportant now as SegWit has been activated with overwhelming support from the community.
In short, SegWit has been a significant upgrade to the Bitcoin protocol that increases the amount of transactions that are able to fit in a block by rearranging the way that transactions are listed therein. SegWit also opens up more opportunities for upgrades to the bitcoin protocol, which will help solve some of the scalability issues that Bitcoin has faced and will face in the future.