SegWit, intended to help speed up Bitcoin transactions and make them cheaper, has been spotted on more than double the amount of transactions over the last three days. This equates to 30 percent of Bitcoin transactions being SegWit ones.
This has a lot to do with major exchanges like Coinbase and Binance adopting the upgrade on their exchange.
Lower fees being felt
The upgrade, which came out on Aug. 1, the same day that Bitcoin Cash came into existence in defiance of this UASF, was intended to help lower the rising Bitcoin fees and help with its transaction speeds.
Now, with more adoption coming to the exchanges and the ordinary people, there is tangible evidence of SegWit’s power.
Transaction fees have dropped to a four-month low of $2, though confirmed transactions per day have also dropped to around 200,000 from more than double that number in December.
When at its peak, the fees for Bitcoin were over $20 and approaching $30, and it is correlated that with a busier network and more transactions. There will be more pressure on miners who have to go slower and charge more.
Thus, it is interesting to debate whether Bitcoin’s current low fees have to do with SegWit or if it is the fact that the usage of Bitcoin has almost halved, and even its market cap dominance is hovering at a historic low.
SegWit is getting an easy ride at the moment as the Blockchain is far less congested and thus it is a solution that is helping an issue which is not big at the moment. However, once the congestion returns, SegWit’s usage will be felt more, but it is not the ultimate solution.
If congestion gets bigger than SegWit can handle, the network will again slow and get expensive again as essentially all that SegWit is doing is making each transaction smaller on the blocks, but an influx of small transactions can still scupper the whole process.