• Dapps:16.23K
  • Blockchains:78
  • Active users:66.47M
  • 30d volume:$303.26B
  • 30d transactions:$879.24M

Bitcoin Scalability Solutions: SegWit Update and its Impact

user avatar

by Giorgi Kostiuk

10 months ago


  1. The Scalability Problem Before SegWit
  2. Addressing Scalability: The Bitcoin SegWit Upgrade
  3. Benefits and Challenges of SegWit

  4. Since its launch in 2009, Bitcoin has showcased blockchain technology to the world, providing a blueprint for a new kind of currency — decentralized, digital, and independent of traditional banking systems. It is the first cryptocurrency and a recognized medium of exchange, with a market capitalization in the hundreds of billions. However, as Bitcoin's popularity grew, it faced scalability issues that demanded solutions like Segregated Witness or SegWit.

    The Scalability Problem Before SegWit

    Bitcoin's creator, Satoshi Nakamoto, equipped Bitcoin with a 1 megabyte (MB) block size limit as a cautious measure against potential spam attacks. Initially, this limit was sufficient. However, as Bitcoin moved into the mainstream, the 1 MB block size limit became a problem. The constraint on transaction numbers within each block led to longer processing times and higher transaction fees, highlighting systemic vulnerabilities. In 2017, transaction fees peaked at nearly $55, making Bitcoin impractical for small transactions.

    Addressing Scalability: The Bitcoin SegWit Upgrade

    To address scalability issues, the Bitcoin SegWit upgrade was proposed and implemented. SegWit, short for Segregated Witness, changes the storage of data by separating the digital signature (witness data) from the main transaction data. This allowed for more transactions to fit into each block without increasing its size. Additionally, SegWit fixed the issue of mutable transaction IDs, laying the groundwork for second-layer solutions like the Lightning Network.

    Benefits and Challenges of SegWit

    SegWit has had a significant impact on the Bitcoin network. As of mid-2023, over 70% of all transactions used SegWit. Benefits include increased block capacity, reduced transaction fees, and the fix for transaction ID malleability. However, SegWit also faced criticism and caused community division, ultimately leading to the creation of Bitcoin Cash. Critics argued that the core issue was the need for increased block size, not just data storage changes.

    The SegWit upgrade has been a crucial step in improving Bitcoin scalability. It has provided immediate benefits in terms of increased capacity and reduced fees, while setting the stage for future enhancements like Schnorr signatures and Taproot. SegWit has proven to be significant for Bitcoin's adaptability and growth.

0

Rewards

chest
chest
chest
chest

More rewards

Discover enhanced rewards on our social media.

Other news

Hong Kong Develops ETP Market by Adding Digital Assets

chest

Hong Kong accelerates financial growth through the integration of digital assets into the ETP market, increasing volumes and product diversity.

user avatarGiorgi Kostiuk

Olaxbt Raises $3.38M to Enhance Its AI Cryptocurrency Trading Platform

chest

Olaxbt has raised $3.38M from Amber Group to improve its AI-driven cryptocurrency trading platform.

user avatarGiorgi Kostiuk

EIP-7983: A New Step Towards Protecting Ethereum from DoS Attacks

chest

The EIP-7983 proposal by Vitalik Buterin aims to enhance Ethereum's resilience to DoS attacks by establishing a gas ceiling.

user avatarGiorgi Kostiuk

Analysts Forecast XRP Could Surge to $32

chest

Analysts predict XRP may rise to $32 amidst consolidation above $1.90, generating interest among investors.

user avatarGiorgi Kostiuk

CZ's Skepticism Regarding TON's New UAE Golden Visa Program

chest

Discussion on the new UAE Golden Visa conditions from TON and reaction from prominent figure CZ.

user avatarGiorgi Kostiuk

Michael Saylor Predicts Bitcoin Growth Amid Active Investments

chest

Strategy founder Michael Saylor released bullish forecasts for Bitcoin, highlighting optimistic signals and increasing institutional investments.

user avatarGiorgi Kostiuk
dapp expert logo
© 2020-2025. DappExpert. All rights reserved.
© 2020-2025. DappExpert. All rights reserved.

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.