A new report released by the Bitcoin data tracking website suggests that 90% of the total bitcoin in terms of the amount of value is being sent using the optional Segwit protocol. However, despite the rise, the average transaction volume is only 40% which has spiked to 50% in recent months.
The recent surge in usage could be attributed to the increase in usage of the Segwit protocol in the last year. Apart from that major crypto exchanges around the globe already support the protocol and more exchanges are supposed to join on the bandwagon in the first quarter of 2019 as well.
The increased use of the optional protocol in 2018 is being hailed as the reason behind lowering the bitcoin transaction fee on the network.
What is Segwit and How does it work?
Segwit was introduced into the Bitcoin blockchain as a soft-fork in the summer of 2017. Being a soft-fork update means that the protocol is backward compatible as well. It means the protocol is compatible with non-segwit running nodes and addresses.
SegWit was introduced as a scaling and security solution on the Bitcoin blockchain, the new protocol removed the digital signature form the block, allowing for double transaction speed on the 1mb block size. It also eliminates any chances of signature forgery thus enhancing the security aspect.
The Crypto Community is Divided Over the Use of SegWit
SegWit for sure helps in providing both scaling and security solutions on the off-chain network. However, the Bitcoin and Bitcoin cash community are divided over its use, while Bitcoin community is solely focused on solutions be it on-chain or off-chain, but the Bitcoin cash community prefers on-chain scaling of larger blocks.
People need to understand that Segwit being an off-chain scaling solution also allows for other possibilities like the Lightning Network to be implemented. The BCH community has been critical over many other possibilities to help make the Bitcoin network better. The recent cry about increasing the limited supply of Bitcoin was received with mixed emotions, however, the BCH community was out-right against it.