http://www.coindesk.com/segregated-witness-bitcoin-block-size-debate/A newly introduced proposal for how the bitcoin network can be scaled to handle greater transaction volumes is gaining traction in its once divided development community.
Called segregated witness, the proposal was debuted by Blockstream co-founder Pieter Wuille at Scaling Bitcoin Hong Kong on 7th December. Arriving to general acclaim, it has already been hailed as a "turning point" by technologist Andreas Antonopoulos and positioned by Bitcoin Core developer Greg Maxwell as a solution that could provide a fourfold increase in capacity to the network in a "short time frame".
Most notable about segregated witness is that, unlike other proposed bitcoin improvements, it can be introduced to the network as a soft fork, meaning that it would avoid forcing all those running the bitcoin software to upgrade their clients in near-unison, thereby reducing the risk an upgrade splits the bitcoin blockchain.
Segregated witness is perhaps best described as a novel workaround to the block size issue that affects how certain network variables are counted toward block size.
In bitcoin, transactions include one or more input fields showing where the funds come from, one or more output fields indicating where they’re going and a signature that validates that the owner had the ability to execute the transaction.
"Now signatures go into the 'from' field," Lightning Network developer Tadge Dryja explained. "[In segregated witness] the signature is separate."
More specifically, segregated witness takes the signature out of the transaction and puts the data into a Merkle tree in the coinbase component of the transaction, or the input of a generated transaction. This change would make transactions appear smaller to current nodes on the network, so that more could be included in a bitcoin block, even if blocks are still limited to 1MB by protocol rules.
“If the signatures would add 0.75MB [of capacity] to a block to a 1MB block, it would now be equivalent to 4MB,” developer Doug Roark said, echoing the description put forth by Maxwell and Wuille.
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