SegWit Use Hits 50% -- A Soft Fork Success Story?
A little over a year on from the launch of SegWit (Segregated Witness), a Bitcoin soft fork, use of the protocol upgrade has crossed 50% of bitcoin transactions for the first time.
The controversial SegWit upgrade, first proposed in late 2015 by developer Pieter Wiulle, is designed to reduce the size of bitcoin transactions, improving the transaction capacity of the bitcoin network, and in turn reducing fees for users. SegWit uses less data per transaction by splitting them into two segments.
Some think SegWit doesn’t go far enough and opted instead to hard fork bitcoin, creating bitcoin cash, which supports much larger block sizes, potentially fitting many more transactions into each mined block.
It’s possible that the latest bump in SegWit transactions can be put down to its adoption by the BRD cryptocurrency wallet, which began converting to SegWit receive addresses at the beginning of October.
“[BRD] support [for SegWit] will start with an opt-in period beginning in October 2018, allowing all forward-thinking pioneers to take the plunge into the new Bech32 (a SegWit address format) world and turn their smartphones into a pure SegWit machine. Shortly thereafter, these changes will be rolled out to our entire user base as the default setting,” wrote Aaron Lasher, chief strategy officer at BRD in late September.
Take up of Segwit has been relatively gradual, climbing to 25% of bitcoin transactions after six months, with the likes of major U.S. cryptocurrency exchange Coinbase announcing support for SegWit in February.
"SegWit adoption has been slow and steady considering the upgrade was implemented over a year ago,” Crypto Compare chief executive Charles Hayter told LongHash. “Nevertheless, its adoption is helping to lower bitcoin transaction fees which is great for everyone in the industry."
Since Segwit went live Bitcoin fees have fallen, though not consistently. Bitcoin transaction fees hit record levels in December last year as bitcoin and cryptocurrency fever swept the world, somewhat damaging SegWit’s initial claim that it would help to reduce fees. Once Bitcoin’s epic 2017 bull run petered out in early 2018, transaction fees did indeed begin to fall — as SegWit support grew.
At the current rate, it will be another year before 100% SegWit support is achieved. But some think that adoption will now accelerate.
"Finally, Segwit is reaching critical mass,” Glen Goodman, bitcoin analyst and author of forthcoming book The Crypto Trader, told LongHash. “I expect the network will now move swiftly towards 100% SegWit adoption."
But SegWit is only half of what many see as a two-pronged attempt to scale bitcoin and make it more suitable for a higher number of smaller transactions.
The Bitcoin Lightning Network, first proposed in a 2015 white paper by Thaddeus Dryja and Joseph Poon, is the other half of the plan. The Lightning Network adds a layer on top of the Bitcoin blockchain, where transactions can be passed back and forth before being added to the underlying blockchain — in theory reducing the load on the blockchain.
Like SegWit, support for the Lightning Network has been slow on the uptake. But it is growing. It now seems unlikely that either SegWit or the Lightning Network will fall by the wayside, even if the road to mainstream adoption has been rockier than anticipated.