Bitcoin activates Segregated Witness

(September 2) As volume of transactions vastly increased of bitcoin, problems arose concerning delays, costs, and other issues that led to discussions as to how to solve the problems.

Many bitcoin miners and others wanted to adopt what is called Segregated Witness a program that would remove some data from each transaction block and place it in a separate extended block. This would leave more room for data in the block. As well, the block size would be extended to 2 mb from the present one. The proposal was called SegWit2x since it would also expand the size of a block in the blockchain to 2 mb. from the present one. Coindesk describes what SegWit2x would do as follows:

First, SegWit2x seeks to upgrade bitcoin in two ways: It would enact the long-proposed code optimization Segregated Witness (SegWit), which alters how some data is stored on the network. It would set a timeline for increasing the network's block size to 2MB, up from 1MB today, to be triggered about three months after the SegWit activation

A deadline of August 1st was set for the decision on the issue. A group that disagreed with the SegWit2x proposal unilaterally changed the block size to 8 mb from one creating what is called a hard fork in bitrcoin creating a rival coin bitcash. The process is described in some detail in a recent Digital Journal article.

Investopedia defines Segregated Witness as follows:SegWit is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness in short, means to separate transaction signatures.The concept of SegWit was formulated by Dr. Pieter Wuille.

The appended video provides a very simplified explanation of SegWit but gives a general idea of what is involved.

The activation of Segregated Witness produced a soft fork rather than the hard fork that happened on August 1st producing two separate coins bitcoin and bitcash. The differences between a soft and hard fork is explained on the appended video posted in May before the actual bitcoin hard fork in August.

An agreement to activate SegWit was reached earlier in August actual activationdid not happen until August 23rd. The activation will allow more information to be incorporated into a block. A recent article also notes:Bitcoin blocks now have a weight limit instead of a size limit. Depending on the types of transactions included, this means that blocks can get up to 4 megabytes big — though some 2 megabytes is a more realistic maximum. This should decrease network fees for users, and speed up transaction confirmation times. As bitcoin magazine notes: Bitcoin blocks now have a weight limit instead of a size limit. Depending on the types of transactions included, this means that blocks can get up to 4 megabytes big — though some 2 megabytes is a more realistic maximum. This should decrease network fees for users, and speed up transaction confirmation times.

An even more important change is that bitcoin will now be able to incorporate second-layer technologies such as the Lighnting Network. Litecoin is alreadytrying to incorporate the network into its operations. The Lightning Network when operative should completely solve the problem of congestion caused by the increasing number of bitcoin transactions. A recent article says of the network: "The payment layer, first proposed by Joseph Poon and Tadge Dryja about a year ago, promises to support a virtually unlimited number of off-chain transactions among users, at nearly no cost – while leveraging the security offered by Bitcoin." Changes are happening very quickly with bitcoin and it looks as if in the future it will be much more versatile. According to the appended video that explains the Lightning Network, there has already been a Lightning Network transfer on the Litecoin system.