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CEO & IT Architect of SatoshiLabs believes that without Segwit, bitcoin can’t operate as an efficient settlement network and transaction facilitation system.
Bitcoin, bitcoin scaling, Segregated Witness, Segwit
Slush, CEO & IT Architect of SatoshiLabs, the parent company of Bitcoin hardware wallet manufacturer Trezor, believes that without Segregated Witness (SegWit), Bitcoin will be like gold - just as bad, inefficient and limited in functionality.
SegWit was originally released in Bitcoin Core v0.13.1 on Oct. 27, 2016, as a scalability solution. It was designed to maximize block size and reduce Blockchain congestion in order to handle a larger volume of transactions.
In the past, developers such as Lightning co-author Thaddeus Dryja noted that SegWit is an actual block size increase solution, contrary to the claims of most Bitcoin Unlimited and hard fork supporters. During his personal tests, Dryja discovered that SegWit could handle 3.7 MB blocks, a size significantly larger than that of the current Bitcoin block size.
“The new software doesn't touch non-witness blocks. The blocks are bigger. I have a script that will spam testnet and make 3.7MB blocks. It's not a 800KB regular block with txids and output scripts, and a 2.9MB witness block with just a bunch of signatures. It's a single block, that looks pretty much the same as old blocks with a few extra requirements, that's 3.7MB.”
However, criticisms continued to emerge on SegWit as a scalability solution as it fails to provide an immediate and fixed expansion of the Bitcoin Blockchain. In other words, community members are skeptical toward SegWit because there exists no guarantee that SegWit will provide a 3.7x increase in block size.
As SegWit support started to increase, the community began to emphasize SegWit’s ability to introduce two-layer solutions into Bitcoin by eliminating transaction malleability. Most notably, SegWit enables Lightning, a solution which allows the facilitation of micropayments. The community began to realize that off-chain scaling solutions such as Lightning and TumbleBit can address additional scalability issues on top of SegWit’s optimization of on-chain transactions.
Slush further noted that Bitcoin is more like gold without the presence of SegWit, as it limits the functionalities of the Bitcoin network. It can’t operate as an efficient settlement network and transaction facilitation system without proper on-chain and off-chain scaling technologies.
While expanding the Bitcoin block size is important to reduce transaction delays, Slush explained that it is equally important to activate SegWit to introduce a new generation of applications and solutions.
“Bitcoin as Gold is Bitcoin without Segwit. Just activate it and whole world of new applications and solutions will appear.”
Currently, the support rate or SegWit is nearly identical to Bitcoin Unlimited to the point wherein Bitcoin exchanges had to release a collaborative statement on the potential Bitcoin Unlimited hard fork execution. In the event of a hard fork, Bitcoin exchanges including Bitfinex, Bitstamp and BTCC announced that Bitcoin Unlimited will be considered as an alt-asset, not as Bitcoin.
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