Wednesday , 18 October 2017

SegWit Lock-In: What the Tech Milestone Means for Bitcoin

On August 8, the Bitcomune network registered the Segregated Witness (SegWit) protocol, a scaling solution that will lay the foundation for a number of important improvements and accelerate the introduction of innovative solutions in the Bitcoin network.

The changes took place at block 479 708, but before the activation of the decision for another two weeks – this will happen after block 481 824 (it is forecasted on August 21).

In this case, bitcoin will be one step closer to changing the amount of resources in the $ 50 billion storage, which potentially will pave the way for more exciting promising technologies, such as the Lightning Network of the highest level and other embedded developments.

Entering a grace period

The original idea behind the SegWit grace period is simple – it gives miners time to upgrade their software so that they can change in unison. So, while this may sound like yet another delay, it’s actually an essential step.

After this two-week period, miners who have upgraded their software to support SegWit will create blocks that enforce the new rules. This means miners who have not upgraded will be at risk of losing their rewards (worth roughly $42,000), since their blocks would be rejected by other miners. At the point of activation, though, it’s still unclear how long it will take for the code change to ripple through the ecosystem and to actually be adopted by users, wallet providers, exchanges and other essential network infrastructure.

A number of services are already primed to support SegWit, including one of the most-used wallets, bitcoin startup Blockchain, as well as major bitcoin exchanges Kraken and LocalBitcoins.

However, some notable voices contend any larger embrace of SegWit could take longer given the costs involved. All in all, this remains a matter of dispute.

Further, while it’s one of several SegWit-related deadlines to pass recently, that shouldn’t undercut the significance of this particular milestone – the lock-in is the step that actually ensures SegWit will be added to the network.

As such, the idea that SegWit will have reached this level of support could be seen as a breath of fresh air for many. Despite lingering critics, it’s fair to say SegWit enjoys broad support (though the exact details of proposals for its enactment have varied).

In this light, today may be best viewed as a turning point in network development.

Perhaps most notably it ensures at least some sort of scaling-related tech will be added to the network, without the creation of an entirely new blockchain to get there.

And its enactment could go a long way toward encouraging other advances, showcasing bitcoin’s willingness to change, however cautiously.

Proposed in 2015, and introduced for users to run at the end of last year, SegWit has taken just over a year-and-a-half to go from concept to production.

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