Massive adoption on the network would help mitigate congestion and high fees. The community is still far from being able to enjoy the optimized services of the network.
In recent weeks, users of the Bitcoin network have been facing difficulties such as high congestion and high fees. This suggests that the complete adoption of SegWit (Segregated Witness) addresses would have helped mitigate such an adverse situation. However, there is still a long way to go to reach massive acceptance, while this software is waiting to be able to offer its advantages.
Transactionfee data indicate that 47% of Bitcoin transactions occur in Legacy addresses, whose fees tend to be higher than those processed with SegWit. According to these records, three years after the activation of the protocol on the Bitcoin network, the community is still unable to enjoy the benefits that it offers.
SegWit does not represent a complete solution for the level of congestion and the high fees generated on the Bitcoin network. However, it offers benefits that would help reduce these inconveniences. This makes it possible to expand the capabilities of the network, making it lighter.
This protocol was an improvement on the Bitcoin code that separates the digital signature from the rest of the main block. This generated space savings, allowing a greater number of transactions per block, thus accelerating the processing of transactions on the network. Faster operations would also decrease the competition for user fees, as well as their price.
With the massive adoption of SegWit for Bitcoin, users would have saved up to 40% in fees. The significant benefits lead many analysts to recommend the immediate implementation of the tool. This would allow them to remain competitive, as Andreas Antonopoulos explains.
Everyone Wants Cheaper and Faster Transactions
There is no complete performance optimization for the Bitcoin network that includes enabling all of its features, as the low adoption of SegWit suggests. Further adoption may not have occurred because it is optional software. This allows the receiver of a transaction to use SegWit, even if the sender does not yet support it.
Many exchanges and wallets are aware of the benefits that SegWit offers, which is why they have enabled support for it. However, several companies that provide services have postponed their transition. For that reason, several specialists have warned for some time that user demand is key to driving mass adoption.
Users must look at the prefix of an address to identify whether it is in a Legacy or SegWit format. In this way, Legacy addresses start with a 1 and correspond to the P2PKH format. Regarding native SegWit addresses, they begin with the acronym bc1. A third format (P2SH-P2WPKH), which corresponds to addresses that start with a 3, is non-standard or nested SegWit.
Last year, the percentage of transactions on the Bitcoin network that involved SegWit reached an all-time high of 53%. Since then, the figure has remained in that range, as the Blockchair website shows.
By Alexander Salazar
