Hey, guys! I know I promised this to be posted in the morning, but I wasn’t able to and I’m sorry about that. Anyway, I’m here to discuss what is SegWit (which means Segregated Witness) and Bitcoin Unlimited in layman’s term.
I know you’ve been reading a lot about it recently since they said the deadline for the implementation of either this two would be on August 1st. This has been a topic for years now, so I’m sure that this has been studied well by the people and community who are trying to implement this solution.
Just to inform you guys, what I’m about to share is my own understanding about the things I have read about, so if you could share some deeper thought about it feel free to do so by dropping a comment below.
So let us talk about first as to What is the current situation of Bitcoin?
If you noticed, transacting with Bitcoins are kinda slow at the moment and at the same time, it now involves some higher transaction fees than before. Years ago, I’ve been using Bitcoin Wallets that doesn’t require transaction fees, but today they have transaction fees to expedite my transactions. Usually, I tend not to use Bitcoin for daily use because it takes some time to transact and it has fees involved.
My basic understanding about that is because there are a lot of transactions happening while there are limited miners to process them that cause some delays in completing transactions. We know that mining is not an easy job, it requires technical knowledge and budget to run high powered computers that are really costly. Not only that, mining gives lower revenue that trading (I believe), so not all people would really opt into mining.
Now, having that said, two camps are currently debating about how to resolve this issue.
Let’s start with SegWit or also known as Segregated Witness.
This solution aims to lower the size of the codes that a transaction contains so that the 1MB current size of each block can have more transactions each. They said that they can do that by scraping out the signatures (which are the information of the sender) and the public keys of the recipient will remain. The signature was said to be placed on an extended block which should not affect in delaying in any transactions.
To summarize this, the SegWit can be beneficial but is being argued to be a temporary solution for the delaying of transactions. They wanted to retain the essence of the Bitcoin from being decentralized. They don’t want to split the chain into two since this would retain the same Blockchain that Bitcoin is currently using, it will just improve the codes that each block contains. This could be easier to implement and changes wouldn’t be so bothering.
On the other hand, Bitcoin Unlimited propose a different solution that really opposes the idea of SegWit.
What they aim is somehow a centralized Bitcoin. They wanted Bitcoin to be working as a regular currency, which can be used on a daily basis and quicker manner. At the same time, they wanted to give some authority to Bitcoin miners, by allowing them to decide when the block size should be increased and how much should be the transaction/miner fees that should be charged each transaction. They said that the block size of 1MB each should be increased into 2MB to allow a higher number of transactions to be processed.
Having that said the Bitcoin currency may be split into two, one would be BTC (which will run on a block chain that has 1MB block size) and BTU (which will have the 2MB Block size). Some people would really want this to happen because the amount of Bitcoin that they have can be the same amount that they’ll get on BTU. So it means, that if you have 5BTC, you’ll also have 5BTU.
I also read something about giving a newly issued Bitcoin to miners as a reward for each transaction completed. Well, I got that from one of the articles that I saw, but I’m not sure if that’s what they really meant.
If I have to choose from these two I would like to go with SegWit. Why?
Because first of all, it would retain everything. The Bitcoin’s essence is to have it decentralized, many of us loved Bitcoin because it is more secure and private. We all know that if the Bitcoin currency would split into two, the supplies will be doubled, which means the demand would be low and so the price. If it’s true that Bitcoin Unlimited will issue new bitcoins for miners, therefore, the supply would always go up and the demand may not increase either.
Based on my opinion, Bitcoin unlimited is wanting to have Bitcoin to be centralized so that they can get a better profit from it. It sounds nice to increase the block size, but it is hard to be implemented than SegWit. It sounds like the Bitcoin Unlimited wants to make Bitcoin as their business , organization or something like that. While SegWit still aims the Bitcoin’s core values.
I hope for those who are still confused about this, may have been enlightened a bit. My ideas here are not being forced to be agreed by anyone. Please leave a comment if you have something to share or correct me on some points that I have talked about.
Please like, share, follow and subscribe for more. See you all!