The SegWit Situation
It’s no secret that Bitcoin transactions can sometimes feel like standing in line for a roller coaster that’s just not moving. According to Mark “Murch” Erhardt of Chaincode Labs, a whopping 88% of Bitcoin transaction inputs are tossing money out the window on fees they don’t even need to pay! How, you ask? Well, the culprit is the percentage of folks still using legacy transaction formats. Only 12% are taking advantage of SegWit, which is like finding the express lane but deciding to stay in the slowpoke line instead.
Legacy vs. SegWit: The Ultimate Showdown
Erhardt noticed that sticking to old transaction formats is keeping Bitcoin blocks from reaching their full size. You know that feeling when there’s a traffic jam, and you’re wishing everyone would just get off their phones and drive? Yeah, the bloated Bitcoin mempool, with its 107-block backlog, is somewhat akin to that. SegWit is the speedy alternative that can save you money and time, reducing the blockchain’s bloat.
Erhardt’s Tips for a Thinner Blockchain
“The longer less efficient output formats are prevalent, the more future blockspace debt we accumulate.”
Wise words from Erhardt himself! His call to action? Get with the program and start using SegWit for all your transactions. He argues it’s about time wallet providers got on board with supporting SegWit, especially since it’s been around for over three years. Sounds like someone is getting a little impatient!
Where Are We Now?
The mempool has been holding onto transactions for a tedious 57 days, leaving many users pondering what gives. With BTC being a powerhouse, holding 98.3% of the SHA256d hashrate, the need for efficient transactions is higher than ever. Over the past month, average block sizes are strutting at 1,320.39 kB while fees made up a hefty 16.13% of mining rewards. Can we say the fee game is strong?
Benefits of SegWit: More than Just Low Fees
While SegWit doesn’t physically shrink transaction sizes, it cleverly alters how data is processed. When you use SegWit transactions, data in the witness component is regarded as non-essential, resulting in smaller displayed sizes—and consequently, cheaper fees! Think of it as a fancy discount for making smarter choices.
Getting Started with SegWit
Ready to hop on the SegWit train? Start by locating a wallet that supports these transactions. You can move funds from legacy addresses (those pesky addresses that start with a “1” or “3”) to shiny new SegWit addresses (those heroic addresses that start with “bc1”).
A popular option in the SegWit wallet world is Electrum, which also features multi-signature transactions and a neat way to import/export your private keys. Many exchanges, like Bitstamp and Binance, are slowly crossing into the SegWit territory. So sending Bitcoin to these exchanges from your SegWit wallet can give you a sweet fee discount.
