It’s been well over 24-hours since Segregated Witness activated on the Bitcoin network, and cryptocurrency spectators have been watching to see if the protocol actually helps the network scale. Following Segwit activation, on August 25 at approximately 7:10 am UTC on block 481947 the mining pool Bitfury processed a block larger than 1MB.
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Bitfury Processes a Block Larger Than 1MB
Segregated Witness (Segwit) is now live on the bitcoin network. During the first 24-hours of activity, some individual bitcoiners and companies began testing Segwit transactions. On August 24 some businesses like Trezor, Ledger Wallet and Openbazaar announced their wallets were “Segwit ready.”
Then on August 25, software developer Justin Camarena, announced he crafted a transaction that led to a mined block over the 1MB block size limit. Block 481947 was 32KB larger than 1MB and confirmed 2164 transactions worth over $9M. Camarena works for the merchant Bitrefill and says the company sends these types of transactions all the time. He says if more businesses jumped on board with Segwit transactions people would see a difference.
“We’re a merchant, we have these [types of transactions] all the time,” explains Camarena. “Very similar to exchanges, except they have more outputs depending on how they do it. But yeah, if only a few more moved to segwit we’d get the ball rolling.”
We received all those as incoming payments, and I aggregate them to another wallet in low fee periods. All further aggregations at Bitrefill.com will be with Segwit as will all incoming payments.
Segwit Criticisms Begin Just 24-Hours After Activation
Segwit is here, but not everyone is cracking bottles of champagne as many are waiting for the technical merits of this protocol to show its worth. Currently, the Bitcoin network’s transaction queue (mempool) is pretty backed up with 60,000 to 80,000 unconfirmed transactions at the time of writing.
Because of the backlog, the average fastest and cheapest transaction (tx) fee on the network is currently 510 satoshis/byte, or over $5 per bitcoin tx. This has caused many skeptical discussions concerning the merits of Segwit relieving network congestion. On August 24 bitcoin developer Jeff Garzik writes to his followers on Twitter;
Bitcoin per-transaction fees, with Segwit active: – Average $7.14, – Median $4.16.
Criticisms like these have led to responses from Segwit supporters that it will “take time” to get to 1.7MB transaction throughput. Timeframes discussed have been months or even a year to see the upgrade take full effect as every wallet developer would have to “Segwit ready” their wallets, and most users will have to update wallet software as well.
According to the Bitcoincore.org website allegedly over 80 businesses stated they were “Segwit ready” months ago, 29 companies said they were in the midst of working on it, and 27 bitcoin-based organizations said they planned to integrate the protocol. Whether or not these companies utilize Segwit-based transactions is an entirely different story. Moreover, some bitcoin proponents are saying in order to see actual lower fees and faster throughput, the bitcoin ‘community’ might have to wait even longer until the Lightning Network is ready.
What do you think about the first 24-hours of Segwit activation? Do you think users need to be patient and wait and see if the protocol delivers? Let us know in the comments below.
Images via Shutterstock, r/bitcoin, and Twitter.
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