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Friday, February 12, 2021

What is SegWit?

 In order to understand what SegWit is, we first need to understand how Bitcoin transactions are made. SegWit stands for Segregated Witness.

What is SegWit?

As we know, when we send bitcoin to someone, this transaction is added to the bitcoin blockchain in a new block. In this new block added, there is some information about the transaction we made. These consist of sender information, recipient information and digital signatures. This digital signature is also called witness or witness.

The digital signature covers approximately 50% of every bitcoin transaction, and this is a huge rate. There are many bitcoin transactions on a bitcoin block, and about half of each of these transactions are witness signatures.

The size of the new ring to be added in the Bitcoin blockchain can be at most 1MB. In other words, there are many transactions in a 1MB bit box and half of these transactions are the signatures of the witnesses.

When Bitcoin first came out, the number of users was not as high as it is now, and since the number of transactions was low, it did not take much to verify these transactions. But today there are millions of bitcoin users and a lot of transactions are being done. Users sometimes have to wait days for these transactions to be confirmed. In addition, transaction fees have increased as the work of the miners performing the verification process has increased.

On the other hand, every user using a desktop wallet has to download the entire blockchain to their computer, and the size of this blockchain has exceeded 130 GB as of today. Considering that half of this blockchain contains no transaction information, only witness information, a solution to this problem must be found.

This summer, two different options have been proposed to solve this problem.

A group suggested increasing the size of each block to be added to the bitcoin blockchain. In this way, more transactions could be fit into a block.

Bitcoin cash, which emerged recently by leaving bitcoin, basically uses this solution logic. The block size of 1MB in the Bitcoin blockchain has been increased to 8MB in Bitcoin Cash.

Although this solution relieves the network in the short term, the same problems will arise again when the number of users continues to increase in the long term.

The solution offered by the second group is to change the block transaction verification system. In this system, larger blocks can be used, as in bitcoin cash, but only users who request this can use it. For those who do not want to use large blocks, the signature part of the transaction, ie the witness part, is separated from the transaction.

In other words, those who want to continue using 1MB block size will no longer receive signature information that covers half of this block. It means adding more transaction information to this vacant part of the block.

Soft Fork ve Hard Fork

Soft fork means soft fork. It is part of the SegWit soft fork that took place in August. The transition to Soft Forka is entirely up to the user's request. Those who use the updated version can work in harmony with the previous versions. So it provides a backward compatibility. Older versions of Bitcoin software can recognize new blocks. After the Soft Fork update, all users will be able to recognize the new blocks, whether they have made this update or continue to use the old version.

A hard fork on the other hand is a fork in the Bitcoin protocol that is not backwards valid. Users using Bitcoin software are required to update their software after this update, otherwise these software will not be used and will not recognize new blocks. If half of the miners want to keep using the old software and half the new software, this will cause the blockchain to fork. Two different block chains emerge. If you do not update your software, you will continue on a new blockchain.

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