Segregated Witness in the nick of time
The growing interest in Bitcoin made transactions less fluent. That’s the problem which founders of a cryptocurrency wanted to avoid. Luckily, Bitcoin Core development team has proposed a solution.
Segregated Witness (Segwit) is a new way to record information about a transaction. Initially, a size of blocks was 1MB. Thanks to Segwit it will increase to 2MB. Free space to including more transactions is made by removing signature data.
Beyond the change of blocks’ size, there are few more improvements. Bitcoin Core introduced it on their blog. Here is a simpler description:
- Malleability Fixes – before Segwit hackers could change a 64-digit hexadecimal hash called a transaction identifier. Now it is impossible, so transactions are safer.
- Linear scaling of sighash operations – signature requires bigger operations, and it scales quadratically. Segwit resolves this problem as the operations scale linearly.
- The signing of input values – hardware wallets verified total amount of Bitcoins spent, but had problems with defining the fee. To know the fee system needed a full copy of all the input transactions and what’s more, needed to hash each one. Segwit gives all needed information with input and can sign the spending transactions.
- Increased security for multisig via pay-to-script-hash (P2SH) – transaction multisig were hashed. If someone tried to steal the funds during the transaction, they would need to find a collision. To do it, someone needed a big computing power. Segwit secures this kind of theft by using 256-bit SHA256 hashes for payments to a script hash.
- Script versioning – every change in a script requires backward-compatibility. Adding a new command requires hardfork. Thanks to Segwit the version of script’s language used in the transaction can be saved, also new commands are implemented with softfork.
- Reducing UTXO growth – UTXO database is built by a chain of blocks. As the number of transactions is growing, UTXO database is increasing as well. After Segwit, signatures aren’t saved in the database.
- Efficiency gains without verifying signatures – initially all the transactions had signatures. To verify them clients needed to download all the pieces of information. This process took time and load clients’ wallets. Segwit is separating signatures so users with “light wallets” won’t have to transfer unnecessary information.
To sum up, Segwit made transactions quicker and safer. It’s also decreasing consumption of resources. Thanks to Segregated Witness we can make micropayments in just a few moments.
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