Segwit is about 2 years old, what impact does it have on Bitcoin?

Summary

Segregated Witness is a protocol upgrade implemented by the Bitcoin network on August 23, 2017 at block height 481,824.

The implementation of the isolation testimony enables Bitcoin networks to support new developments such as lightning networks

Since the isolation test was activated, the Bitcoin network has generated 67 blocks greater than or equal to 2MB.

Segregated Witness is one of the most important and controversial protocol upgrades in the Bitcoin protocol. Segregation Witness and the implementation of other software upgrades have opened up a new journey in the development of Bitcoin technology, including Lightning Network and Atomic Swaps.

Segregated Witness has been activated for nearly two years at the bitcoin network block height of 481,824. Since then, the Bitcoin network has experienced significant growth, with nearly 40% of the daily trading volume of the Bitcoin network being SegWit transactions, as shown in the following figure.

Source: Bitcoin Visuals, The Block

We believe that the anomalous rectangular gap between March and April 2019 is due to VeriBlock. Based on previously observed data, VeriBlock's trading volume accounted for 24% of all Bitcoin transactions in the month prior to the end of the VeriBlock test network. When VeriBlock ended the test network, the transaction volume of the Bitcoin network immediately decreased, and when VeriBlock started the main network, the transaction volume of the Bitcoin network immediately rose.

As Veriblock co-founder and CTO Maxwell Sanchez explained to The Block, although VeriBlock supports SegWit transactions, its PoP miners currently do not generate these transactions. This explains why SegWit's daily trading volume rose to nearly 50% when VeriBlock ended its test network in March 2019, and after VeriBlock launched its main network in April 2019, SegWit's daily trading volume dropped to about 40%. The following table shows the impact of VeriBlock on Bitcoin SegWit transactions.

Source: Bitcoin Visuals, The Block

In fact, the isolation witness SegWit increases the block capacity. After the self-isolated witness is activated, the Bitcoin network begins processing blocks larger than 1MB. The table below shows the data of the daily average block size of Bitcoin after the self-isolated witness is activated. “Striped Size” refers to data that is sent to old nodes that do not support quarantine witnesses. “Witness Size” refers to the data sent to the support isolation witness node. Currently, Bitcoin's daily average block size is 1.2MB.

Source: Bitcoin Visuals, The Block

In addition, since the segregation witnessed SegWit was activated, the Bitcoin network created approximately 71,000 blocks larger than 1 MB, of which 67 blocks were equal to or greater than 2 MB. On March 31, the largest block was created at Bitcoin block height 566,575, which was 2,377,364 bytes (about 2.4 MB).

Source: Blockchair, The Block

The number of transactions processed per block also increased from an average of 1,690 to 1,875. As shown in the figure below, the current number of transactions processed per block is an average of 2,500. 1

Source: Bitcoin Visuals, The Block

in conclusion

Isolation witnessed the implementation of SegWit, opening up a new experimental field for the development of Bitcoin network technology and achieving several important milestones. These are all new experiences that Segregated Witness SegWit brings to the Bitcoin network. If the quarantine witness SegWit's application rate is close to 100%, the daily generated block size may exceed 2MB, and the Bitcoin network will support a larger daily transaction volume.

Remarks

1 1,690 is calculated from the median daily transaction volume processed by each block during the period from 2016 to SegWit activation.

Original title: "An analysis of SegWit's impact on Bitcoin"

Original source: Steven Zheng, TheBlock

Translator: Block Rhythm BlockBeats Translate HQ