Segregated Witness Activates on Bitcoin: This is What to Expect

23 Aug


By: Aaron van Wirdum Aug 23, 2017 9:59 PM EST

The Segregated Witness (SegWit) soft fork has activated on the Bitcoin network.

As of block height 481,824, found at 1:57 UTC by BTCC, all SegWit ready nodes started enforcing the new SegWit consensus rules. As Bitcoin’s biggest protocol upgrade to date, this introduces a whole new data structure, which changes the appearance of Bitcoin blocks for upgraded nodes — while non-upgraded nodes should continue to function as normal.

More concretely, SegWit activation means that Bitcoin’s block size limit is replaced by a block “weight” limit, which allows for blocks up to 4 megabytes in size. Additionally, and perhaps more importantly, SegWit transactions won’t suffer from the “malleability bug,” which in turn enables advanced second-layer protocols like the Lightning Network, atomic swaps, MAST, and more.

Here’s what to expect for the next couple of hours, days, weeks, months and beyond…

The Block Size Limit Becomes a Block Weight Limit

Bitcoin blocks now have a weight limit instead of a size limit. Depending on the types of transactions included, this means that blocks can get up to 4 megabytes big — though some 2 megabytes is a more realistic maximum. This should decrease network fees for users, and speed up transaction confirmation times.

However, this doesn’t mean that all blocks will immediately bump to 2 megabytes in size today. For a transaction to utilize the added space, it must be sent from a SegWit address (or more accurately, a Segwit “output”) — not just to a SegWit address.

At the time of activation, of course, no bitcoins were locked up in SegWit addresses whatsoever. That wasn’t possible up till now. So at the very least, bitcoins must be spent once to a SegWit address once first. Only when they’re spent again will they benefit from the extra space.

Additionally, wallets and other applications need to be ready to accept SegWit transactions. Some wallets, like GreenAddress, may offer this option on day one, or shortly thereafter. “We had this in testnet on by default for a very long time now,” GreenAddress developer Lawrence Nahum told Bitcoin Magazine. “We’ll make it’s available almost immediately after activation; we just want to make sure activation is smooth before we enable it.”

Similarly, large Bitcoin service providers could start accepting SegWit transactions right away, though some may need more time to prepare. BitGo, a Bitcoin infrastructure provider for major exchanges like Bitstamp, Kraken and OKCoin, expects to be SegWit-ready relatively soon as well.

BitGo engineer Jameson Lopp told Bitcoin Magazine:

“We’ve not set an actual date, though we certainly want to deploy it as soon as possible. I expect general availability sometime next week.”

Some other wallets and services, however, may take a little longer; how long will differ from wallet to wallet.

Lightning and More

Arguably even more highly anticipated than an increased block size, second-layer technologies like the Lightning Network and, further out, Merkelized Abstract Syntax Trees (MAST), will be more easily built on top of Bitcoin, thanks to Segregated Witness.

Most of this technology is still a work in progress, and it could take several more months before regular users are expected to use it. That said, it is likely that there will be experimentation on Bitcoin’s mainnet rather soon, according to Lightning Labs CEO and cofounder, Elizabeth Stark.

“Today we released version 0.3 alpha of our Lightning Network Daemon software, which is the last major release before our mainnet beta release,” said Stark to Bitcoin Magazine. “We’re not giving any exact predictions, but our goal is to get it up and running as soon as it’s thoroughly tested and stable. We may also see some test mainnet transactions by developers once SegWit activates.”

More pictures and the full article can be found here:
http://www.newsbtc.com/2017/04/02/japan-officially-recognises-bitcoin-currency-starting-april-2017/

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