Bitcoin Network Sees Nearly 90% SegWit Transactions in First Week of February via P2SH Data
Segregated Witness, or SegWit, is a soft fork protocol upgrade for the Bitcoin Network. In the beginning of 2018, the transaction volume only accounted for about 15% of the entire network. The numbers slowly grew over the year, reaching 50% by October.
Now, a recent report from p2sh.info shows that it accounts for 89.7% of the transaction volume.
The protocol has been largely controversial since it was implemented, and has been fairly slow, considering that the upgrade wasn’t mandatory to the operation of the network. The transaction fees have declined since the soft fork occurred, and there is been many exchange platforms that have already supported the adoption of this soft fork for network players.
With the soft fork, the block size goes from 1 MB to over 3 MB without digital signatures in the input. The signatures have a major impact on the volume, taking up 65% of the transaction. Without these signatures, there is more space for transactions to go into a block, and there are less blocks needed for the same volume of transactions.
Originally, the intention of SegWit was to correct a security flaw that impacted the potential for manipulation of transactions. Without transactional signatures, there will not be any opportunity for fraudulent entities to change anything in the transaction ID. One user on Twitter, PESligo, said,
“For me SegWit was not about block size, it was about more efficient code reducing TX fees and more important introducing the technology to allow L2 and many other technologies to Bitcoin. Until a few more Dev’s add their voice I see no need for all this noise.”
The new nodes without SegWit are able to process transactions without creating any issues on the upgraded nodes. The protocol was introduced in 2017, but most of the network players have not altered any part of it, regardless of how substantial of an influence they have.
However, miners do not benefit from these changes. In fact, without digital signatures, the mining reward is much smaller, which is why there’s significant opposition.