Bitcoin Transactions Are on 100% Rise After SegWit Update
Last week’s announcement of getting a full support of Segregated Witness to the Bitcoin Core software has brought a very positive change in the number of transactions on the Bitcoin network. The Bitcoin transactions on the network have shown a 100% rise or have doubled since the full support for SegWit has been introduced.
Moreover, in the last 15 days, major exchanges like Bitfinex and Coinbase have integrated the SegWit support on their platform. As a result, Bitcoin traders and enthusiasts are witnessing a significant reduction in the cost of Bitcoin transactions with faster processing speeds.
As per the data available on segwit.party, the percentage of transactions on the network using SegWit inputs was floating between 10-15% only before the full support was announced. After the announcement, the graph shows a clear jump from 15% to 30% for SegWit inputs.
One of the major reasons for Bitcoin transactions to be stalled just between 10-15% is the huge congestion seen on the Bitcoin network that was the result of the huge inrush of crypto investors for buying Bitcoins around the Nov-Dec 2017 period. This congestion had almost choked up the Bitcoin network leading to a huge surge in the transaction costs and well as a huge increasing in the processing times between two transactions.
Since then, in order to improve the operational ability of the network, there has been a huge demand from the Bitcoin investor community to implement SegWit. As per the definition, “SegWit is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.”
This means that unlike the Bitcoin forks, which create a Bitcoin derivate by increasing the block size, the SegWit transactions aims at the optimal utilization of the available block space in the network. As a result, this reduces congestion on the network by a great amount thereby keeping the transaction costs low.
Moreover, fixing the transaction malleability bug, which SegWit aims to do, also provides a base to establish a more efficient version of the Lightning Network. Lightning Network is one of the most sought-after developments to the Bitcoin network. This is a second-layer protocol developed atop the Bitcoin blockchain which will take transactions off the Bitcoin blockchain and increase the network’s operational ability by manifold times.
A key reason for the slow adoption of SegWit is that it needs to be enabled specifically across the exchanges and wallets. This means that users need to have SegWit specific wallets address as it doesn’t allow to bridge SegWit and non-Segwit transactions.