SegWit Transactions Reach All-Time High
Segregated Witness (SegWit), a protocol that reduces fees and processing times for bitcoin, now accounts for more than 50 percent of all bitcoin transactions.
The optional transaction type was first made available on August 2017, introduced after a soft-fork network update. SegWit enables the Bitcoin blockchain to settle transactions faster compared to its usual processing times.
Currently, the bitcoin blockchain has a limit of 1MB per block. This means that no more than 2,500 transactions can be processed in 10 minutes on the network.
But those that enable the SegWit transaction type can expand this limit. In theory, if all transactions were using SegWit, the limit could be multiplied by four times, meaning that instead of 4 transactions processed per second you would have to 16 transactions per second.
Today, SegWit made a breakthrough, as more than 50% of all Bitcoin transactions use its standard, which has theoretically enhanced the network’s processing capacity twofold leading to cheaper and faster transactions for the entire BTC network.
Upon its release SegWit, most leading wallets (like the Trezor or Ledger) immediately integrated support for the standard, but the same cannot be said about crypto exchanges. This is because the testing for development and security required takes longer for the new transaction format to go live on exchanges.
From past SegWit usage, it can be noticed that after its launch on August 2017, the network had 48.5% of all Bitcoin transactions using the standard just 14 months later.
After that period, SegWit usage fluctuated between 40% and 48% up until now, when it reached 50% this week for the first time.
In addition to increasing the scaling capacities of the Bitcoin network, SegWit transactions also permit the integration of layer two scaling technologies such as the Lightning Network, which has also seen some popularity recently.
Featured image: The Block