The Bitcoin Core development team has released a much-anticipated software upgrade designed to help scale the cryptocurrency network.
Version 0.16.0 of Bitcoin Core, the standard software client of the bitcoin network, adds full support for Segregated Witness (SegWit). Its release was presaged by a Github announcement earlier in February.
“Bitcoin Core 0.16.0 introduces full support for segwit in the wallet and user interfaces,” said a statement circulated Monday on a Linux Foundation mailing list.
The code is intended to solve bitcoin’s scalability obstacles. Bitcoin’s main protocol has a maximum block size of 1 megabyte, which restricts the volume and speed of transactions.
By separating signature and transactional data, SegWit reduces the “weight” of transactions, which creates more room in any given block. This does not increase the network’s block size limit, but it does increase the volume of possible transactions.
The removal of the signature information also resolves the problem of transaction malleability, which was previously a security vulnerability because transaction IDs could be altered. Likewise, this impeded the implementation of second-layer protocols such as the Lightning Network.
SegWit also introduces a new address format created by Bitcoin Core contributors Pieter Wuille and Greg Maxwell that provides a better user experience, facilitates the automatic support of SegWit and lowers transaction fees.
Major crypto exchanges have recently moved to support SegWit, including GDAX and Bitfinex, however.
“SegWit provides not only an immediate benefit for users, but also a foundation for future bitcoin development,” Bitfinex said in a Medium post. “By supporting SegWit addresses, Bitfinex is tackling three of the biggest crypto-enthusiast concerns: transaction fees, transaction speed, and total network capacity.”
Bitcoin construction image via Shutterstock