What is SegWit (Segregated Witness)? How it works, differences from SegWit2x, and the advantages and disadvantages when implemented
When you look at cryptocurrency news, you’ll see the word segwit.
Also, the term SegWit2x appears and it can be very confusing! What a situation...
Segwit is a very important concept for solving Bitcoin’s scalability issue, so I’ll explain how it works, the difference from SegWit2x, and the benefits of its implementation.
There are also potential drawbacks to implementation, so let’s go through them in order.
What is SegWit (Segregated Witness)
SegWit stands for “Segregated Witness,” and literally means “separation of signatures.” It is a method to solve Bitcoin’s scalability issue.
Bitcoin, which started operation in 2008, processed approvals in blocks with a data capacity of 1 MB, and registered transaction information on the blockchain by connecting each block in sequence.
However, as Bitcoin became famous and the number of transactions increased, block verification could not keep up.
If block verification could not keep up, not only would transaction confirmations be slow to reflect in trading, but when using Bitcoin for in-store payments, customers could end up waiting for tens of minutes at the checkout until the transaction is confirmed, making it a very big problem.
SegWit is one of the solutions devised by Bitcoin developers to address this issue.
SegWit is a technique to register more transaction information within the fixed 1 MB size limit by separating transaction data from signature data and storing the signatures more efficiently.
What is SegWit2x?
SegWit2x is a different approach from SegWit aimed at solving Bitcoin’s issues.
SegWit focuses on how to store data efficiently within the fixed 1 MB block, whereas SegWit2x aims to increase the block’s data capacity from 1 MB to 2 MB.
SegWit does not change the block size itself, but only changes the data structure inside, so continuity with previous blocks is maintained; in contrast, SegWit2x changes the block size itself, which can break continuity with the existing blockchain and make consistency harder to maintain.
Because of this, SegWit2x became a highly debated topic with strong proponents and opponents.
Ultimately, the opposition’s argument prevailed, and SegWit2x was postponed.
How SegWit (SegWit) works
SegWit’s mechanism starts by separating transaction information from signature information.
Transaction information is stored in the transaction information area, while signature information is stored in the signature information area.
When validating signatures, data is compressed to reduce volume and stored efficiently.
In theory, the data volume can be compressed to about one-quarter.
As a result, a block that was 1 MB in size can practically store transaction information equivalent to about four MB.
However, in actual operation, data compression won’t be so perfect, and it’s estimated to increase to about 1.7 MB.
Benefits of implementing SegWit
One benefit of implementing SegWit is that, unlike SegWit2x, the block’s structure does not change, so it can address scalability without forking the blockchain.Scalability issueswithout forking the blockchain.
When forks occur, expectations and speculation can cause large market swings, so for currencies that require stability, SegWit’s solution is more advantageous.
A second benefit is improved resistance to tampering.
With SegWit, by separating signature information into a different area, it becomes possible to prevent tampering through this separation.
In the original Bitcoin block structure, there was a risk of tampering such as double-spending due to hacking, but the introduction of SegWit resolves tampering issues.
Drawbacks of implementing SegWit
The drawbacks of SegWit are .......Continue here ⇩
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