Although Segregated Witness (SegWit), which is a change in the way Bitcoin transactions are handled, was originally activated on the network back in August, user adoption of the new feature has been relatively low. According to, the percentage of transactions on the network that use SegWit inputs stalled between 10% and 15% over the past few months.

Over the past couple of weeks, a few key entities in the Bitcoin ecosystem have rolled out enhanced support for SegWit, which has led to greater capacity for transactions in each new block. More specifically, the percentage of transactions on the network that use SegWit inputs recently grew from 15% to 30% over the course of less than two days.

As more exchanges, wallet providers, and other entities involved with the creation of Bitcoin transactions adopt SegWit, the total capacity of the network will continue to rise. Although the congestion on the network has calmed over the past month or two, the historically-high fees and unreliable confirmation times were a key point of contention in the community over the past couple of years.

SegWit is an improved method of handling Bitcoin transactions that has a number of effects on the network as a whole. The two ways that SegWit impacts Bitcoin that are most relevant today are an increased block size limit and a fix for the transaction malleability bug.

The upside of an increased block size limit is obviously the increased capacity made available on the network as a result (more transactions can be processed per second). On the other hand, larger blocks means the cost of operating a full node is also increased, which could harm the level of decentralization found on the network. Read more from…

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