What is Segregated Witness and why is it important?

Okay, Segregated Witness or “SEGWIT”, you’ll be surprised to learn is not a 70’s TV programme, but something do with the “Blockchain” used by cryptocurrencies such as Bitcoin, at the moment Bitcoin does not use SEGWIT, but coins like Litecoin etc do.

What is the Blockchain?

So the blockchain simply put is a ledger, or a list of transactions that are mathematically tied together, the Blockchain is stored all over the world, not just in once place.

What is Bitcoin Mining

Bitcoin mining (or coin mining) is the process of verifying using mathematical formulae that a transaction in the Blockchain is genuine, for this task miners (like me) get a small reward. At the moment this generates new Bitcoins as we mine, but in the future, we will just be paid the transaction fees.

What’s the Problem?

The problem is, that as the network gets more used, and bigger, it gets slower and more expensive to mine the coins, however, this is somewhat offset by the increase in the value of coin against other currencies. – Still it’s expensive.

What is Segregated Witness?

Essentially it’s operating the signature from the data, and making it cheaper to process. yay! Which makes the Blockchain more efficient, and miners happier (hopefully). At the moment Bitcoin doesn’t have SEGWIT, but maybe in the future it will, who knows? It’s much more difficult to make changes to Bitcoin than other currencies because Bitcoin’s Market capitalisation is much larger than the other coins, for whom SEGWIT is more easily implemented.

If you’re bored by this, that’s cool, most people are, please enjoy a glass of wine, and go back to what you were doing, before I wasted your time explaining this technology that makes me really excited!.

Here’s a really great video about it!

 

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