Segregated Witness Explained [Segwit] (Litecoin/Bitcoin)

segregated witness it's been hailed it as bitcoins great-aunts that sets out to fix a plethora of issues for malleability all the way through to scaling it hasn't however they met that resistance from miners who are currently threatening its activation due to concerns they have raised regarding its technological and economic complexity in the hopes of finding a better solution segregated witness or segwayed as it is otherwise known is a fundamental change with alters the structure of blocks on the blockchain blocks are made up of multiple components they are the block header which itself contains the block version previous block cache merkel route timestamp target and nonce a transaction counter and finally a list of individual transactions a block is currently limited to one megabyte in size and each component has its own size which takes up space within that block the majority of space well over 99% is taken up by transactions which themselves have their own components namely the inputs and outputs inputs being where coins are coming from and outputs being where they are going to the majority of space within a transaction is taken up by a signature that is located in the inputs this signature accounts for around 65% of the space within a single transaction and acts as proof the B sender controls we required funds to make for payment segregated witness segregate and relocate this signature from within the input to its own structure towards the end of the transaction known as the witness this makes calculating the transaction ID much more predictable and in some cases but not all completely prevents transaction malleability at tags when individual attempts to change the transaction ID it also allows for an increase in the block size limit from one megabyte to just under 4 megabytes as every byte in a witness for a segment enabled transaction counts as one unit of weight whilst every other byte within a transaction counts as four units however since blocks aren't comprised of 100% witness data and there are additional size increases on segway transactions it is never going to reach four megabyte and instead be effectively capped at around two megabytes or double the current capacity taking these signatures out of the transaction inputs does however create its own compatibility issues the merkel route found within the blocks header is a structure that allows Vblock to verify transactions without requiring the main bulk of the transaction information it is created by taking every transaction ID in the block and twice hashing them together in what is known as a Merkel tree until one number remains the Merkel route the witness data is no longer a part of the transaction ID but still needs to be included in the transaction otherwise the block will not be valid therefore a separate Merkel tree for the complete transaction data is needed by attaching this to the first transaction it successfully connects the witness data and the transactions together and allows segregated witness to become backwards compatible due to this new block structure older nodes will still accept these as valid although as with any upgrade to Bitcoin itself it won't fully understand them however newer segments enabled nodes will be able to properly validate these blocks as they'll be made aware of the new rule set and be able to recognize this new block structure segregated witness is being implemented by a soft fork which means in order for it to be actually activated on the network 95% of Myers have to be running segregate all software and whilst we don't know how many mine is actually running seg wit if node R anything to go by only around 85% of the network of running core nodes which are the main proponent of segwayed this has led many people to predict bits egg wit will never successfully reach a consensus in order to be activated and others to be quietly confident but I have a given time by the end of the year or in 2017 Aitken centers will successfully be read as its support is currently underestimated it is only right to point out that Segway is very much a foundational change but lays the groundwork for further changes down the road it is not just concerned with malleability and network capacity due to this fundamental change VAR a handful of risks including one the introduction of bugs into the system either with mistakes in its design or implementation those also the possibility of user error surrounding confusion and usage of this new system along with various ecosystem interactions where Bitcoin may already have some hard-coded assumptions which will then be violated due to this new update to transaction fees quite often as is the case now demand outstrips supply as such those who pay more in transaction fees or prioritized over those who don't by increasingly network capacity at least in the short term we could see these transaction fees reduce in size therefore less money for miners and less security on the network if they can't afford to mind a profit and a forced to search some Ram machines down although as will potentially be the case these transaction fees will either continue to rise or appie their release stay the same as the additional capacity offered by segwayed is quickly filled up due to the sheer demand on the network 3 serialization transactions and blocks are currently serialized in order to allow their information to be reconstructed later on if necessarily required this also helps with the stalling of the blockchain and the transmission of its data over the network segways FX's in a couple of ways by adding a note to be coinbase transaction of the blog which adds a further 38 to 47 bytes of information and depending on the transaction type a further minus 1 to 19 percent of information per transaction for block validation time the time it takes to validate a block will also increase due to the additional processing power required to deal the new Segway type transactions and the new witness data Merkel tree however it is expected to be negligible and should add at most a further 7 kilo information to a block or around 1/10 the second on capable hardware five technical debt segregated witness could potentially add to the already growing amounts of technical debt within Bitcoin technical debt referred to code may be implemented now but can cause some serious issues further down the line Reviva it needing to be rewritten which can slow down development time due to the Cobra cling more fragile or in some cases with it being retained indefinitely as a poor design choice as touching it could cause users to lose access to the coins they own if it was later changed six larger blocks was open a faster growing UTX o or unspent transaction output database this database is important because it allows nodes to fully validate and check transactions if an input is not present in which database and it means the transaction is not valid the UT XO database is expected to grow regardless of seg weight and its current size sitsit about 1.5 gigabytes or 10 gigabytes went uncompressed into a computer's memory if you were to feel so inclined for some reason undersecretary would expect this database to grow about twice as fast that's not really an issue until you realize that everyone has to buy the computer parts required in order to store it as such in the long run stalling and actually holding this information for many people may just become unfeasible and as such will result in greater centralization on the network 7 long term scaling while segregated witness is a one-time increase in the network capacity it is not a long term or medium term solution to the scaling issue it does however enable layer 2 networks as well as fix a quadratic sig hash scaling bug which could help reduce the negative impacts of future scaling development when they eventually happen P reviews and tests have of course been carried out by many groups of people to try and dine out any issues with a full liquid lease and the core developers have been rather transparent in listing all of these issues on their side along with how they plan to address every single one of them however unlikely they are to arise however there is still those core developers and key public figures believe one way or the other in this matter and each has his or her own reasons for doing so including people such as Jameson lob of bit Co who argue it is a moral duty to keep the network running like a well-oiled machine others have suggested because if people continue to dig their heels in on topics such as segwayed they should be left behind this would include not putting it up to the actual vote but opting for a non backwards-compatible method of upgrading otherwise known as a hard fork although there are many other reasons to perhaps choose a hard walk over a soft four in this situation although it's a shared belief amongst some developers but no one individual or group has the authority to make this change and forced upon the network which is what a hard walk would entail unless a significant amount of the user base agrees with it Bitcoin developer Jeff Kasich argues it's egg weight and its insistence on being implemented via a soft fork will only create an overly complex system but does not offer enough user benefit in return an overhand Bitcoin developer Luke – jr.

Argues that the only way a harmful could significantly improve on sacred would be by breaking compatibility with existing wallets including permanently destroying any bitcoins that may be locked up until after any proposed hard fork there are of course alternative solutions being worked on most notably flexible transactions or Bitcoin improvement protocol one three four by Tom Zander which again isn't without its detractors but it also has its own supporters band we may touch on it further another time if segwayed does end up having support issues it may gain more prominence as a possible answer to bitcoins problems then again there is also the suggestion of a repurposing segment without B block size increase allowing it just the other more welcome and less controversial changes it brings voting the segment will begin on the next difficulty change which should be the 18th of November from that point on it has one year to successfully reach a consensus if a consensus is not read for the Miss time period seg wit in its current form will not be activated and the Bitcoin network will buy itself back in the same position it originally started but in need of a new solution a big thank you to Luke – jr.

of Bitcoin core and Tom Zander of Bitcoin classic by helping me write and source this video they were very helpful they may be two sides of the same coin but their insights were very much appreciated you can find links to them as well as their respective projects including Bitcoin knots which is Luke's version of Bitcoin featuring all these own improvements and Tom's flexible transaction concept in the description below along with all the sources of this video so please do check them out be sure to subscribe and as always I will see you next time.

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