Segregated Witness (SegWit), an update that came into effect in Bitcoin during 2017, has reached its historical maximum levels of adoption, fulfilling its purpose of lightening transaction traffic on the network and reducing user fees or commissions.
Along with Lightning, the second layer solution that has also seen impressive adoption in the last year, SegWit is one of the main causes of the low volume of transactions on hold in Bitcoin, as well as the low fees.
According to various sources that allow us to visualize the volume of transactions on the network, the percentage of transactions that spend an input (User Transaction Input, UTXI) of the format currently cover about 80% of all network transactions, when in August 2020 it reached just over 40% of the total volume.
The image above establishes a milestone in the adoption of SegWit by the firm Blockchain.com, a fact that we reported in CriptoNoticias in May 2021, but which went into effect on June 2 of this same year.
Blockchain.com provides, among other things, a wallet of the same name and, despite being questioned for its hybrid custody model (between the website and compatible applications), remains one of the most used and popular wallets in the history of Bitcoin.
Another graph from BitcoinVisuals establishes the comparison between legacy transactions (of conventional formats) and SegWit. In total, it establishes that 257,372 transactions are carried out daily, of which 198,548 are SegWit and 58,824 are from the other formats.
While the percentage of total SegWit transactions has increased, another metric seeks to reflect the actual economic activity in Bitcoin, which uses this transaction format.
For this, the concept of payments is used, which is applied to the number of transactions made minus the number of transactions of change or change that a user receives when spending a partial output (output). Batch transactions are also deducted, which would have several outputs of the SegWit type, so in this sense a single transaction is counted.
Likewise, the weight in memory (vbytes) of transactions and the average amount of satoshis (fractions of BTC) paid according to this weight, is at the lowest levels of the last year, according to Mempool.Space.
During the first six months of this year there were times of congestion and higher prices in rates, but since June they have dropped drastically, also coinciding with the adoption of SegWit by Blockchain.com.
For its part, Lightning has had a growth in the last that we have reported with particular attention in CriptoNoticias. Increasing its capacity makes it possible to send not only small transactions, but increasing amounts of BTC through this second layer of the Bitcoin network.
The effect of adopting Lightning could be the elimination of very small transactions in terms of the amounts of BTC sent, but heavy on memory, which undoubtedly lightens the mempool of Bitcoin.
In another aspect, the increase in the price of BTC, which you can also check in our price calculator, could cause some users to refrain from spending their precious savings in the short term, in the expectation of future earnings.
Although the adoption of SegWit may be difficult for some exchanges and services, time has passed and the coordination of the development teams seems to be palpable in the performance of the Bitcoin network.