SegWit “Locked-In:” Bitcoin’s Bigger Blocks Only An Activation Away!
The much awaited and discussed event of the past few days happened as per the plan. The Segregated Witness (SegWit) has officially locked-in on 8th August 2017, at block #479707. This block is the point where the required level of miner support was reached, within the required time.
While full activation will happen in a couple of weeks, this is seen as a significant milestone for Bitcoin’s future, as it will solve the long-standing problem of delayed transactions on the bitcoin network.
Around the same time last week, the focus of the entire Bitcoin community was on the new baby on the block, Bitcoin Cash aka BCash, born on August 1, a little after 12:20 UTC. Now with the umbilical cord cut, the baby is under observation.
The question people have been asking is: Hold, buy or let the new currency mature for a while?
Still in its nascent stages, it’s difficult to say anything convincing about the future of the new cryptocurrency.
While we wait for the new currency to find its way; Bitcoin hit a record high, breaking through the $3,500 mark, just ahead of the lock-in and immediately after the lock-in, it was around $3,430.
SegWit Lock-In
The SegWit lock-in indicates that SegWit has been added to the Bitcoin network. The SegWit upgrade follows the guidelines in BIP 91, which is the Bitcoin improvement proposal activated on July 20 by the network. It dictates how any upgrades to Bitcoin, including SegWit are made.
The SegWit Proposal
SegWit mainly proposes moving some data outside the main bitcoin network and increasing the block size.
To understand the SegWit proposal, it is important to understand Bitcoin transactions. As we have seen in our previous post, the problem that has been bothering Bitcoin is the block size. Each block on the Bitcoin network processes a certain number of transactions within a time frame. With the increasing number of transactions, getting all of them through the system has become a problem, leading to a huge backlog. This has been a topic for debate over the past few years.
Want more information? Visit our post on the Bitcoin hard fork.
First Milestone: SegWit Lock-In
Implementing SegWit involves achieving two milestones: Reaching the code “lock-in” threshold and “activation.”
SegWit requires 95% support from miners, and initially miners were not too fond of SegWit. If that continued or they had stopped offering support ahead of the lock-in deadline, the lock-in would not have happened. But that was not a cause for concern, as miners had a stake in it as well. They risked losing a huge financial incentive, if they had withdrawn support.
Now that SegWit has been successfully locked-in, this information may not really matter much, but it helps the novice understand the workings of SegWit better.
Second Milestone: SegWit Activation
The next step is SegWit activation, which is expected to happen in two weeks, as the change will only activate at block 481,824, as shown below. This is expected to happen around August 22.
Now that SegWit has been added (locked-in) to the Bitcoin network, the software for all bitcoin services will also need to be upgraded to support the new style of transactions. Bitcoin miners and other services will now be busy for the next two weeks, upgrading their software to handle the changes.
This will involve increasing the block size limit on the blockchain and removing signature data from Bitcoin transactions. A part of the transaction will be removed to free up space, and allow more transactions to take place.
Finally...
This lock-in comes after more than a year of being proposed, and is considered a turning point for Bitcoin. A majority of businesses and miners have supported the SegWit implementation, followed by a 2MB hard fork in November. So far things are going well Bitcoin, but there is opposition to the second part of the plan, from many quarters, with Core developers saying that the hard fork in November will not have their support.
We will just have to wait and see what happens. If things follow the expected route, it will finally change how Bitcoin transacts and stores data, putting an end to the woes of the last few years. This could also prove to be a confidence booster for investors, as it reflects Bitcoin’s willingness to change, and offers the possibility of further scalabiity in the future.
This positive sentiment is likely to take Bitcoin price higher.
Have you invested in Bitcoin? What are your thoughts on SegWit Implementation? What are your predictions on Bitcoin prices? We would love to hear your opinion on anything related to the current happenings in the world of Bitcoin.
Author: @knowledge1
Great to have this locked in.
Now, will we have another new coin come out of the next hard fork?
And, will all major upgrades aka hard forks continue to create new coins.
Yes, and no. In this case, there will be another split because community and miners(not as much) are divided as to which Bitcoin to support. Many people also claim that 2MB is useless now that we have Bitcoin Cash.
Future forks don't necessarily mean new coins. It depends on the miner & community support a coin has. Should Bitcoin need another hard fork, without any politics (meaning 100% support) there won't be a split.
I've written a post on post-SegWit Bitcoin and the consequences of a split here if you'd like to check it out.
Does this still leave the opportunity for SegWit2x to be implemented? To my understanding SegWit and SegWit2x are not the same.
SegWit2X (BIP 91) enforces the original SegWit proposal (BIP 141) by orphaning non-BIP141 blocks, and a hard fork to 2MB 3 months after SegWit activation (which will happen on August 21st).
Alright so, following the hard fork in November there is a possibility of another chain split resulting with a similar alternate chain that does not support the 2 MB increase?
Also, what does the activation on the 21st mean exactly? Just that the network consensus support for BIP141 has surpasses a specific percentage?
Is the hard fork a scheduled event, meaning after block X the protocol is updated with the non-BIP141 exclusion rule?
Sorry for the delayed response. It's not a possibility, it is definitely happening. There will be SegWit + 1MB (Bitcoin Core), SegWit2X and Bitcoin Cash.
The activation of BIP141 requires a lock-in period (2016 blocks) of which 95% are SegWit blocks, and another 2016 blocks for activation, which doesn't require anything and is there as a "buffer" period so that businesses and pools can upgrade their software in time before it activates. Activation is projected to happen on 21st August and SegWit will be running on the Bitcoin mainnet then. Since SegWit has locked in already, we are past the point of no return.
Yes, the 2MB hard fork has been scheduled to occur on block 494784, estimated in November.
i think segwit give the good reflect to btc
good work sir to inform us in details about segwit lock in its really new for me about lock in
It's good they are fixing the scalability issues, because these issues could eventually impede Bitcoin's widespread acceptance. Bitcoin will always have value for being the most widely accepted. Unless that changes, I see nothing but a long term up trend.
nice post... upvoting you
dnt forget to give it back sir... :)
Bit coin investor.
I am concerned about the Segwitt in November.
As seen in the case of BCC issuance, the Chinese miners seem to be too strong.
The power of the reserve currency is huge, but when will it be in an independent influence?
I expect that the price will be determined according to the market flow.
we need more segwits! Bitcoin price will explode again!
Yea I did, and from that day on my "life excitement" heavily increased lol. So many news, so many panic, so many action!
You really need a stable pulse for that. Nothing for weak hands
Good one! You have a lot of interesting content there :)
yes its right when 1st august bcc lacunch its price after some time go up but after it come down and btc increase still and high upto 3400 its the good sign for btc after segwit