A bitcoin network update, defined as Bitcoin Improvement Proposal 141 (BIP141), is expected to be locked in once the signaling period is completed.
SegWit, a scaling proposal activated on July 20, achieved a lock-in threshold today. It was reached at block 479,707 that was mined by BitClub. Thus, 100% of bitcoin mining pools supported the blockchain upgrade.
“It’s been a long and hard process, but we’ve learned tremendously along the way,” said Ciphrex CEO, Eric Lombrozo, who is a proponent of SegWit. “I look forward to the next generation of use cases and applications this will enable and to watching the ecosystem mature.”
SegWit, however, will not be locked in until the end of the signaling period on Wednesday. The activation will require at least 95% of all miners to signal support for the update during a 2,016 block difficulty adjustment period, which will last for about two weeks. During this time, miners will also be able to upgrade their software before the activation of the improvement. The waiting period will be completed around August 22.
“With the change named “SegWit” already locked in and about to be activated in two weeks, a new period of innovation in the Bitcoin blockchain starts, says Esteban Ordano, Tech Lead at Decentraland. “When Satoshi Nakamoto coded the original client, he made a couple of mistakes in the scripting system that are critical to achieve consensus between different bitcoin software.”
He continued: “Fixing them would require a hard fork (which we have learned is very difficult to coordinate), with innovation also hindered by these design errors, as changes to the scripting system are very limited. This was until late 2015, when core developer lukejr suggested that there might be a way to include many of the fixes into a bundle that became known as SegWit, through an upgrade process that does not break consensus on the network (a soft fork – of which Bitcoin already had at least 4, instead of a hard fork).”
SegWit is expected to bring significant changes to the bitcoin platform and in addition to higher capacity will eliminate transaction malleability and provide higher security. Besides, the new solution will address such issues as script versioning, transaction malleability, linear scaling of sighash operations, and increased security for multisig.
“One of the most promising projects unlocked with this change is the Lightning Network, which will bring about new projects benefiting from instant, low fee payments. With it, a new period of innovation starts: micropayments, trustless exchange between blockchains, and improved anonymity are just the first things that will get introduced to the technical infrastructure of public blockchains, he added.”
Bitcoin, meantime, seems to be keeping strong with its market cap accounting for more than $56 billion. After reaching a record level of $3,484 yesterday, the digital currency slightly decreased and is now priced at $3440.28, according to CoinMarketCap.
“It’s not a surprise that the price rose in response to this outcome, the resilience of the network and the community effort to keep consensus,” said Mr. Ordano. “All developers have been wanting SegWit for a long time, as the improvement is substantial. I think the community should be thankful for all the actors that played their part to make this upgrade happen, directly or indirectly, like Andrew Lee from Purse.io, who started the conversation with Extension Blocks, Sergio Lerner from Rootstock who originally proposed SegWit2x, Barry Silbert for getting some key players together to talk, and even to the UASF crowd, for their genius contribution – however controversial it was.”
Overall, it took some time to reach the threshold, mainly because some bigger mining pools refused to support the update. Earlier, the proposal was criticized by some of the community members.
“In hindsight, it’s become clear that miner activation of soft forks cannot be relied upon when there exists a divergence of interests between miners and users. In the cooperative case, it is a tried and tested mechanism which, if done correctly, is known to work smoothly. However, in the adversarial case it simply does not work,” Lombrozo wrote in an article about SegWit activation.
The deployment of the solution started in October 2016, with the current 2016 block activation period is number 20 out of 26 within the year.
SegWit is where signature data is removed from bitcoin transactions making them smaller. This, in turn, increases the capacity of the blockchain network, what means more transactions can be included in a chain.
The concept was first introduced in 2015 by developer Pieter Wuille, who has been part of the bitcoin core development since 2011. The solution was presented at the Bitcoin Scaling Conference in Hong Kong in December 6th 2015 and was then adopted by the Bitcoin Core development team.
“After two years of the crypto community infighting, this upgrade is long overdue, and I’m glad the decision was made,” said Ron Chernesky, CEO of investFeed. “The Bitcoin Network finally locks in Segwit activation. This paradigm shift is long overdue and I think the price of bitcoin post SegWit will increase to $5,000.”