What is segwit?
Segwit is an architectural change the way bitcoin transactions are constructed. Signature(witness) will be separated from the transaction that is why it is called segwit. The effect of segwit will solve long standing serious problems and issues simultaneously within bitcoin architecture like: transaction malleability, calculate signatures in different way, it will allow developers to fix problems in scaling of algorithm in signature validation, etc. With segwit the way data is measured, instead block size, block weight will be used. Counting base part of transaction is measured in block weight.
Bitcoin has a lot of problems right now. The whole network have lots of problems but it is still sky rocketing. many people doesn’t agree but many approves segwit. Segwit is also called BIP148. If you’re holding bitcoin regardless if you’re a technical or non-technical person, it is essential to know what segwit is. You may lose up your bitcoin or money from 3rd party wallets if this implementation pushes through. You may also want to take advantage of this segwit and make money out of it. First, you’re not going to lose your bitcoin if you’re securing them and validating them. Securing them means you are keeping the private keys of your keychains(bitcoin wallet) not like keeping them on 3rd party online wallets. Some people are taking advantage on alt coins by converting their bitcoin to other coins.
BIP148 attracts user because most users doesn’t want to pay big transaction fees as we have now in legacy bitoin protocol. Applying segwit will make the process faster and will increase the block size from 1mb to 4 mb.
What’s gonna happen during segwit upgrade?
First what we need to understand is how the upgrades on the bitcoin protocol network can happen. There’s been a lot of disagreement on how to improve Bitcoin on how to handle more the scalability. The way we can upgrade the bitcoin network is: minor activated hard fork, a minor activated soft fork, a user activated hard fork or user activated soft fork. Hard fork stuff is risky and not backward compatible. Most of the nodes will do the user activated soft fork just like Litecoin which activated the segregated witness a couple of months ago. The litecoin community decided to implement segwit by user activated soft fork. Within a few days later, Litecoin miners decided to use miner activated soft fork mechanism and it got activated like that. Many people are thinking that Bitcoin would split into 2 different blockchains, if not all nodes in the Bitcoin network will not support the segwit. The legacy chain of bitcoin will be re-organized if this happens and there would be a new Bitcoin blockchain which they called Bitcoin BIP 148. If you have a bitcoin you might have 2 kinds of bitcoin: Bitcoin unlimitted or Bitcoin segwit. We had this experience in ether. Ether has 2 chains now: Ether classic and Ether. Users are hoping that companies, exchanges and 3rd party services will support the BIP148 because it’s gonna happen and this is for the better and the future of Bitcoin. About the bitcoin economy, it might have a little bumpy price but you will not lose it as long as you have your keys. BIP 148 is a user activated soft fork and it’s gonna happen on Aug 1st.
What am I gonna do to prepare for this Segwit?
Many users are asking what to do when segwit happens. First, be ahead of the curve by reading the UASF guide. Make sure if their service are supporting BIP148 to secure your assets or you’ll just got rob. Get your bitcoin out of the 3rd party service for a while. Email the customer support whether they;re going to support bip148 just like I did on my 3rd party wallet. Good for me that Kraken supports bip148. Bitcoin can go back to 1400 or even lower if ever there would be a split.
Segwit has taken thousands of development hours, million dollars of resources and development cost, 90% of network wants to use it, it is tested, and this is widely wanted.