The lack of incentive has led large platforms to postpone the implementation of the protocol. The Bitcoin ecosystem is not taking advantage of an update that would help with congestion and high fees.
Three and a half years ago, the activation of Segregated Witness (SegWit) in the Bitcoin code took place. However, the ecosystem does not fully enjoy the benefits that it offers. For that reason, a high percentage of the transactions in the chain are paying excessively high fees.
The adoption rate of SegW is not progressing at the pace that users expected, so they have expressed concerns. According to data from Bitcoin Visuals, less than 54% of transactions on the network have taken advantage of the software for a year and a half.
Platforms with a large volume of transactions have not implemented this update. According to the en.bitcoin.it website, that seems to be what has stalled its adoption. A user identified as Dwyte asked, “How difficult is it for a Bitcoin exchange to adopt native SegWit?”
BitMEX senior engineer Gregory Sanders, whose platform adopted SegWit just a month ago, answered the question. He explained some possible reasons why platforms have delayed implementing the protocol.
According to Sanders, one of the reasons has been security, since exchanges prefer to delay adoption to avoid the associated risks. Faced with any difficulty, users’ doubts will abound and nervousness will increase. Therefore, the company may pay a high cost and have many dissatisfied customers.
The engineer added that companies with a large infrastructure have teams responsible for different areas. For that reason, they must ensure the coordination of all layers when implementing new software. However, these personnel are usually busy with tasks such as expanding the business engine of the company. Besides, they have to address issues such as customer management and communications, among others.
In 2018, Bitcoin evangelist Andreas Antonopoulos explained what the aforementioned user raised. This analyst anticipated what would happen some years later. At the time, he recommended not expecting companies to act against their best interests to protect the ideology of Bitcoin.
Effects of the Delayed Adoption of SegWit on the Bitcoin Ecosystem
The Bitcoin ecosystem is not taking advantage of one of the most important updates to the protocol. This is mainly because SegWit optimizes block space when discounting data of the tokens linked to signatures.
Greater capacity in each block allows processing more transactions every 10 minutes. Therefore, there would be less accumulation of unconfirmed operations in the mempool of the nodes and the fees would go down. That would be the ideal scenario but the use of the prevalent Legacy addresses in the chain inhibits the possibility of fully enjoying the benefits.
Delaying the adoption of the protocol encourages congestion instead of fighting it, said Chaincode Labs engineer Mark Erhard. “It seems that the fees still do not hurt enough as 88% of the transactions pay too much. You can help yourself and the network by switching to native SegWit,” he added.
There has not been much change since November when 47% of Bitcoin transactions were still not taking advantage of the benefits of the protocol. It has not changed much since adoption reached an all-time high of around 53%, either. Since then, the maximum adoption rate has been 57%.
By Alexander Salazar