Call for SegWit adoption grows stronger – Can wallets ignore it?

The difference between SegWit users and normal Bitcoin Core users was highlighted, as SegWit users paid a reduced transaction fee proportional to the transactions they conducted.

SegWit or Segregated Witness is the name used to designate the soft fork that took place on the Bitcoin blockchain. It was designated to have the code Bitcoin Improvement Proposal BIP141. The purpose of the improvement proposal was to solve one of the problems towards scalability of the Bitcoin blockchain. This was a bug called transaction malleability and prevented developers from implementing changes such as smart contracts and, more recently, the Lightning Network.

The SegWit soft fork implemented a change in the transaction format of the cryptocurrency Bitcoin. It split the transactions into two sections, with the unlocking signature being removed from the original portion and attached separately at the end. This mitigated the blockchain size limitation problem and thus increased transaction speed.

Where the original data segment would be counted as a normal block with regards to its size, the “witness” segment would be counted as a quarter of its size.

SegWit allows users to perform off-chain transactions as seen in the Lightning Network. It also offered completely backward and forward compatibility. SegWit allowed the block size limit to be increased from about 1 MB to a little under 4 MB by removing the digital signature associated with each transaction, which accounts for about 65% of the space in the transaction.

The list of wallets with SegWit support include Samourai Wallet, GreenAddress, Electrum, BitcoinArmory, Trezor and Ledger Wallet. Exchanges have also taken up support for SegWit, with prominent exchanges BitStamp, BitFinex, Kraken, Shapeshift and HitBTC adding support.

Currently, around 37.9% of all transactions on the blockchain are conducted using SegWit, while paying only 14.6% of the fees. There is call for scalability on the r/Bitcoin subreddit, with a post encouraging users to utilize SegWit. It reads:

“At the moment, 37.7% of bitcoin transaction are segwit and they are only paying 14% of total fees. Switch to a segwit enabled wallet now and help the network scale while paying less for transactions.”

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