Ever since SegWit was first introduced at Scaling Bitcoin Hong Kong in 2015, I have found myself starting sentences with, “When SegWit is live…”, followed by some prediction about how this technology will supercharge bitcoin. In the spirit of the optimism around growing support for SegWit among miners and the broader bitcoin economy, I thought I’d share some of the things I’m excited about for “when SegWit is live” on bitcoin in 37 days (or less!).
When SegWit is live…
- More transactions will fit in each block, and as far as I can tell this will not come at the expense of node or hashpower decentralization. In my humble opinion, more transactions per block is always a good thing as long as we don’t sacrifice the security of the system.
- Transaction malleability will be fixed for SegWit transactions, enabling advanced scaling technology such as a more secure version of the Lightning Network. Lightning Network is very exciting because it opens up whole new micropayment-related use-cases that have simply not been possible on-chain.
- It will be safer to increase the block size limit, due to the way that SegWit fixes the quadratic scaling of hashed data problem. As mentioned earlier in this post, more transactions per block is a good thing so long as bitcoin’s security is not compromised.
- We’ll be able to more easily introduce new script opcodes in bitcoin transactions, enabling advanced security and scalability technologies such as Schnorr signatures, Merklized Abstract Syntax Trees, Dynamic Membership Multiparty Signature sidechains, and more.
I’m very excited to see these and other benefits added to bitcoin because taken together, they strongly reenforce bitcoin’s leadership in the cryptocurrency market since virtually any cryptocurrency feature or use-case someone could think of will be possible either on bitcoin’s “mainchain” or a Layer 2 protocol such as sidechains or Lightning. This adds a tremendous amount of utility for the millions of people using bitcoin, and further increases the network effect and security that makes bitcoin such a powerful technology.
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