An increase in SegWit-enabled bitcoin payments has recently been witnessed reports news outlet, Long Hash. It turns out that this is actually an inverse relationship between SegWit and VeriBlock; that is, as VeriBlock’s presence decreases, the need for SegWit Increases.
SegWit, short for “Segregated Witness”, is a protocol upgrade that increases the block size limit by ridding signature data from Bitcoin transactions. Long Hash argues that traders normally retort to SegWit when transaction fees increase, which makes sense as now, more transactions can be processed.
Despite its advantage, many still do not use this implementation, as only 48.1 percent of BTC payments benefit from this. Blockchair and transactionfee.info have both been referenced by the news outlet as sources that keep track of SegWit use. The former measures SegWit BTC sent, while the latter measures SegWit BTC received.
Now’s the time to introduce VeriBlock, a proof-of-proof mechanism which extends BTC’s security to smaller blockchains in a secure and economical manner. Normally, VeriBlock will only process a small number of transactions as BTC transaction fees rise. Therefore, it was argued that SegWit’s uses may have increased amidst VeriBlock’s stagnation.
Is it true that BTC’s transaction fees have gone up and if so, is a drastic one? According to the claims made, said fees went from roughly $0.54 to $2.36 in a month’s time, namely in May of 2019. As a result, SegWit’s Bitcoin payments went from 40.41 to 45.71 percent in a matter of one week starting May 18, 2019.
Intriguingly, the fees at the very moment may not be of too much of a concern, but it does have an effect on traders, exchanges and developers’ behaviors to name a few. An example of the high fees of 2018 was given, in which exchanges, Coinbase and Bitpay had to reanalyze their interaction within the Bitcoin blockchain. This was also the time in which SegWit use increased by 257% in a matter of months.
Other factors deemed to have pushed the use of SegWit include the mere need to increase network capacity, especially when it is congested.
Ultimately, in the event of increased transaction fees, traders are advised to take advantage of SegWit updates.