VeriBlock announces the adoption of SegWit and says it will now occupy more space on the Bitcoin network. Bitcoin Core developer noted that VeriBlock abuses SegWit block size.
After the newly set record for the proportion of transactions using Segregated Witness (SegWit) technology on the Bitcoin blockchain, community members have said that the increase could be linked to VeriBlock service activity. That is the case of the CEO of the payment processor Bitrefill, Sergei Kotliar, who made the assertion on Tuesday, September 17th, through his Twitter account.
Kotliar said that after checking the network, he found that there is only one entity that sends around 50 thousand SegWit transactions daily, which happens to be VeriBlock. In his tweet he also notes that those responsible for this service boast about that record in a statement posted on Monday, September 16th.
In that release, VeriBlock announces that it added SegWit support to its protocol and that its network participants may now benefit from a reduction of 28.9% in the cost of transactions. It should be mentioned that VeriBlock is a sidechain providing a service that allows any blockchain to inherit Bitcoin’s security. To that effect, VeriBlock records its transactions on the Bitcoin blockchain, thus harnessing the network’s processing power.
VeriBlock will take a larger portion of the actual Bitcoin blockchain on the disk, and the same amount of weight per block, as stated in the post, in which the alpha version of a miner based on its PoP (Proof of Proof) consensus protocol, enabled for SegWit, is launched.
Kotliar indicated that the number of SegWit bench32 transactions increased between 100% and 200%, coinciding with VeriBlock’s adoption of SegWit. Regarding this, Bitcoin Core developer Luke Dashjr referred to VeriBlock’s spam service and noted that they are abusing the increased block size provided by the use of SegWit.
Dashjr posted on his Twitter account that reducing the block size limit could rebalance the unfair advantage/bad incentive created by SegWit.
The release gave rise to several opinions against users who argue that VeriBlock’s activity does not conflict with Bitcoin’s network rules. Some consider that by paying the mining fee, users are entitled to become legitimate Bitcoin users. However, Luke Dashjr asserted that a block size of 256 kB could solve the problem of the SegWit incentive, which is about 500 kB.
Other users think that the market will take care of the situation. In other words, if users’ transactions are not valuable enough, they will not be able to compete for space on the network. Cryptographer Adam Back, inventor of Hashcash, a predecessor of Bitcoin’s Working Test, was of the same opinion.
VeriBlock miners are encouraged to compete with each other, while conducting time-stamped transactions in Bitcoin, for a share of VeriBlock’s reward. Then, a lower VeriBlock price or a higher Bitcoin price will determine a smaller number of VeriBlock transactions.
Regarding this, Back states that increases in Bitcoin pricing will make space on the chain more expensive. If this is combined with low VeriBlock prices, it could lead to a reduction in the mining of VBK, the project token, and its transaction volume.
The debate remains as to whether or not the use of the term “spam” is valid on a public network that is available to any participant who can pay transaction processing fees.
By Willmen Blanco