Bitcoin [BTC] transactions using Segregated Witness (SegWit) Protocol has reached a record high since it was activated on the bitcoin blockchain last year. According to data from Transactionfee.info, a site that tracks the transaction fees paid for bitcoin exchanges, the proportion of transactions comprising SegWit jumped to 50 percent on Thursday, October 4.
The chart posted in a community on Reddit showed SegWit transactions fluctuate spike from around 45 percent to 53 percent on Thursday; this is the highest point it has ever reached.
The Introduction and Adoption of SegWit
SegWit, a protocol that facilitates cheaper and faster transactions on the bitcoin network, was originally activated by August last year. Among other things, the protocol increases the block size of bitcoin from 1 MB to a little under 4 MB, which is a good point for scaling. In simple terms, SegWit detaches digital signatures which accounts for 65 percent of the space required for transactions and attaches it to a structure towards the end of the transaction making more room for transaction data.
Full Support for the protocol was finally included in bitcoin’s latest major upgrade—version 0.16.0—which was released in February. This set the tone for a greater adoption of SegWit which stood below 20 percent just before the upgrade on February 26.
Major exchanges keyed in and provided support for SegWit in order to provide cheaper bitcoin transactions. This in turn led to a general drop in the average bitcoin transaction fees.
As reported by Smartereum, exchanges like Bitfinex and Coinbase Pro (formerly GDAX) hopped on the bandwagon early on assuring support for SegWit in separate in separate announcements. Since then, the proportion of SegWit transactions on the network has increased until it reached the highs on Thursday.
As the protocol grows in adoption, an advanced form of the technology is also gaining grounds. Bech32, a product of bitcoin improvement protocol (BIP 0173), refers to a new bitcoin address format which could support higher transaction speeds.
U.S.-based exchange Coinbase is one of the early proponents of this technology even as discussions about scaling solutions continue in bitcoin communities. Prominent crypto investor and managing partner of BlockTower Capital Ari David Paul aptly summaries the state of bitcoin scaling debates. He notes that there is “plenty of technical debate around SegWit and scaling” adding that “many people agree on the technical points and disagree on the best path forward.”
Solomon Sunny is the market reporter for Smartereum, one of the global leaders in Ethereum, blockchain and currency news. He produces technical price updates on digital currencies and writes recent developments about blockchain.
