An official announcement was made that Bitcoin’s Core software client with version 0.16.0 has added full support for Segregated Witness (SegWit). The SegWit which has been an expected development from Bitcoin’s developer team is finally here.
As per the recent circular on the Linux foundation Mailing List, the statement reads: "Bitcoin Core 0.16.0 introduces full support for segwit in the wallet and user interfaces. This is a new major version release, including new features, various bugfixes and performance improvements, as well as updated translations.”
The much anticipated and awaited development of SegWit is aimed at reducing the processing times as well as the transaction fees from the existing state. With the huge participation of investors last year on the Bitcoin network, users have been eagerly waiting for this update since August 2017.
However, the developer community and even other exchange and wallet provider have been slow to work on this and implement it at their end. However, recently, major cryptocurrency exchanges like Bitfinex and GDAX have recently rolled out this update for its customers.
On its Medium post, Bitfinex said: "SegWit provides not only an immediate benefit for users, but also a foundation for future bitcoin development. By supporting SegWit addresses, Bitfinex is tackling three of the biggest crypto-enthusiast concerns: transaction fees, transaction speed, and total network capacity.”
Understanding How SegWit Works, as per the definition provided by Investopedia “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.”
SegWit reduces the “weight” of the transactions thereby separating the transactional data and signatures and creating more room within a block. SegWit doesn’t change the size of the block in the network but helps to optimize the space utilization within the block and increases the volume of possible transactions.
Also, the removal of the signature information helps to overcome the issue of transaction malleability, that previously existed as a security vulnerability as the transactions IDs could be altered.
This development with SegWit sets a stage for the more enhanced development of the Lightning Network which is a ‘second-layer’ protocol built on the top of Bitcoin blockchain and takes transactions off the chain thereby enhancing the operational abilities of the Bitcoin network.
The full-scale development of the Lightning Network is expected to take place by the end of 2018.