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Segregated Witness has been a controversial development in the world of Bitcoin scalability. While a proper solution to accommodate more transactions, adoption remains abysmal. Moreover, some people are concerned whether or not SegWit will result in lower transaction fees. Surprisingly, Luke Dashjr believes that will not necessarily be the case. An interesting development, that much is rather evident.
The adoption of SegWit is still pretty poor by any standard. With just over 10% of all Bitcoin transactions making use of this solution, there is a lot of work to be done. Unfortunately, this scaling option is difficult to integrate for service providers right now. The code is very rough around the edge and requires a lot of work. Until the adoption rate improves, Bitcoin transaction fees will remain on the high end of the spectrum. That is not an ideal situation for anyone, though.
SegWit Won’t Automatically Reduce Fees
At the same time, there are a few reasons to integrate SegWit. It allows for more transactions per block, which is always good. Additionally, it may help cut down on transaction fees. Or that is how most people envision this scaling proposal right now. Unfortunately, we may not necessarily see lower fees on the Bitcoin network. In the short-term, it may alleviate these concerns, but it is not a long-term solution. This is a rather troublesome development, as it shows Bitcoin will remain a problem child when it comes to fees.
Different people advocate for using Segwit to get lower fees (although realistically I don't think it will make a difference long-term).
— Luke Dashjr (@LukeDashjr) November 25, 2017
Luke Dashjr is one of the individuals doubting lower fees will be the outcome. That is somewhat surprising, although people appreciate the honesty as well. SegWit adoption will still need to increase, even if it just for the additional transaction support. Unfortunately, Dashjr feels SegWit shouldn’t be used until the Lightning Network is ready. A rather controversial opinion, although it makes a lot of sense. Segregated Witness allows for more Bitcoin transactions, which means the blockchain size will keep increasing as well. That is not beneficial to Bitcoin users whatsoever.
It will be pretty interesting to see how all of this plays out. If Segregated Witness can’t reduce the fees, there is little reason to embrace it. More specifically, not until the Lightning Network is finalized and usable by all users. It is unclear how long this process will take, though. The LN may arrive early next year or we might not see it before 2019. It is not something developers can cobble together with a few all-nighters either. These are interesting times for Bitcoin, yet not everything looks rosy whatsoever.
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