Despite all the exploits of Bitcoin especially in recent months, which has seen its price conquer new highs and its user base increase significantly, one major problem that has persisted upon the cryptocurrency is congestion.

The issue of congestion within the Bitcoin community has persisted for some time now. The debate on how best to resolve this issue has seen the community split majorly into two factions, a scenario which can be judged as proof that the power truly lies with the people in the decentralized democratic environment of Bitcoin.

Emiel Sebastiaan van der Hoek, Blockchain Researcher, says:

“The community is split for good reason. Neither solution will solve scalability issues and transaction fee issues of Bitcoin in my honest opinion.”

SegWit vs BU

Initially introduced by Bitcoin Core and Blockstream developer, Dr. Pieter Wuille, at the Scaling Bitcoin conference in Hong Kong in December of 2015, Segregated Witness is designed to separate signature data from Bitcoin transactions. This is claimed to have advantages that include a malleability fix, more flexible programmability and an effective block size limit increase.

On the other hand, Bitcoin Unlimited is a full node software client for the Bitcoin network. Compared to the Bitcoin Core client hard-coding the block size limit to one megabyte, from which it is forked, Bitcoin Unlimited removes the limit, allowing the users to determine the block size by consensus.

Proclamation of support

Barely one week after the time of writing, some major stakeholders within the Bitcoin ecosystem made their support for Bitcoin Unlimited public. These stakeholders include “Bitcoin Jesus”, Roger Ver who launched his new mining pool on Bitcoin Unlimited and the ecosystems biggest Mining pool, Antpool that stated its plan to switch to Bitcoin Unlimited, shortly after which the Bitcoin Unlimited system experienced an attack which brought a bug to light and the numbers of "nodes" hosting Unlimited fell to about 300 from 800 following the attacks.

These developments are proving to be of concern to users of Bitcoin as transaction confirmation times keeps increasing, same with transaction fees. Nevertheless, individuals within the ecosystem would still maintain their preference or none between any of the so far available options in solving the persisting problem of congestion.

A careful observation

Biser Dimitrov, Technology & Business Development Executive, highlights the benefits and none of the given systems while offering his support for Segregated Witness.

He says:

“I am carefully observing how both ideas are gaining traction and support over the last month. SegWit got a lot of media coverage and some serious mining services are standing behind it.”

Dimitrov attaches his support for Segregated Witness to the following reasons:

  • Offers short-term capacity increase
  • Avoiding the risk of two coins.
  • Avoiding new and unproven consensus mechanism
  • Improves scalability.

No permanent solution yet

Kangmo Kim, Founder and CEO at, however, does not see any of the options as a solution to the scalability issue of Bitcoin. According to Kim, these may only be temporary fixes to allow more transactions in the block. He explains that SegWit tries to minimize the additional space but Bitcoin Unlimited does not.

The consequences of any of these proffered solutions according to Kim is that Bitcoin transaction fees will drop in the short term but will increase over time and only transactions that can provide higher fees will be included in the block, and with time, Bitcoin will not be able to accept microtransactions.

Kim concludes:

“In the end, most of the transactions in Bitcoin blocks will be transactions transferring big amounts of Bitcoin so that it can endure high tx fee. For example, when you buy a Tesla, you can use Bitcoin in the future as you can pay 0.1 BTC as your fee. But it does not make sense to pay your coffee whose price is less than the big fee 0.1 BTC.”

Hardfork or Softfork?

Chief Technology Officer at Blockchain Foundry Inc, Jagdeep Sidhu expressed his support for Segregated Witnesses because the process does not involve having to hard fork. Sidhu says that a consensus-driven approach is more likely to lead to further adoption of the Blockchain which is thought of as an immutable ledger not susceptible to external forces. He goes on to say that changing the underpinning design which invalidates all clients on the network at this point undermines the premise of Blockchains and Bitcoins in general and thus leaves users with better alternatives, aka central bank rate targeting mechanisms to achieve more "Ideal Money"​ as John Nash argued.

Another reason that Sidhu registers for his preference is the fact that SegWit will allow for interesting developments in the way of scalability when schnorr signatures will be the next thing to be soft-forked in by Dr. Peter Wuille which will allow for aggregation of signatures without sacrificing security to create smaller footprints on transactions and greater multi signature use cases, and lightning networks will also help with off chain transactions further increasing scaling.

Sidhu concludes by saying:

“A hard fork design is thought to be more complicated than initially assumed and a thorough analysis of consensus systems which fork protocols has not been done to date. Soft fork is the easy implementation that avoids and game theoretical attacks that hard forks would be vulnerable to.”