SegWit adoption at an all-time high for bitcoin network
The percentage of bitcoin transactions using Segregated Witness (SegWit)—which make bitcoin transactions faster and cheaper—hit an all-time high of 49 percent this week. This is a good sign for fans of making bitcoin friendlier–and cheaper–to use.
SegWit adoption allows Bitcoin blocks, which are typically limited to 1 MB, to expand, if necessary, to 4 MB. This allows more transactions to be placed in a block, increasing the number of transactions that can be processed per second by the network. Bitcoin’s transaction speeds vary between 3 and 7 transactions per second. By making blocks four times the size, it means people don’t have to wait as long for their transaction to be included in a block. That means fees are lower, too.
SegWit was introduced in August, 2017, to help with increasing network usage. It reached 40 percent of bitcoin transactions for the first time a year ago. Then, in May, this year, it started rising towards the levels seen today.
The rise in adoption may have been a reaction to rising transaction fees, as network activity picked up again in response to the spring surge in bitcoin’s price. When transaction fees rose from $0.54 to $2.36 during May, SegWit usage rose by 5 percent.
Alternatively, Longhash suggests it was due to a project called VeriBlock. This uses the Bitcoin
blockchain to store data on behalf of other blockchains—essentially riding off its security. But while VeriBlock can account for as much as 20 percent of bitcoin transactions, it’s popularity has been on the wane recently. VeriBlock transactions don’t use SegWit addresses, which would suggest as its numbers decline, the proportion of SegWit based transactions using bitcoin goes up.