{"id":56464,"date":"2018-05-31T17:44:40","date_gmt":"2018-06-01T00:44:40","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=56464"},"modified":"2023-05-25T02:14:30","modified_gmt":"2023-05-25T01:14:30","slug":"bitcoin-scalability-update-segwit-transaction-efficiency-and-lightning-network-implementation","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/bitcoin-scalability-update-segwit-transaction-efficiency-and-lightning-network-implementation\/","title":{"rendered":"Bitcoin Scalability Update: SegWit, Transaction Efficiency, and Lightning Network Implementation"},"content":{"rendered":"<p>Bitcoin SegWit transactions now <a href=\"https:\/\/transactionfee.info\/charts\/payments\/SegWit\">constitute<\/a> over 40% of all Bitcoin network activity as adoption continues steady growth amongst scalability concerns.<\/p>\n<p>Recent statistics from <a href=\"https:\/\/transactionfee.info\">transactionfee.info<\/a>\u00a0show that SegWit adoption has maintained robust growth as large exchanges continue to support the scalability solution.<\/p>\n<p>The SegWit update enabled the network to rapidly clear a backlog of pending transactions during the start of 2018 and its increased adoption resulted in a persistently low average <a href=\"https:\/\/blockchain.info\/charts\/avg-confirmation-time\">confirmation<\/a> time of around 15 minutes.<\/p>\n<h2>Benefits of SegWit<\/h2>\n<p>The SegWit update also permitted the <a href=\"http:\/\/cryptoslate.com\/coins\/bitcoin\">Bitcoin<\/a>\u00a0network to provide malleability in its transactions, allowing the implementation of functionality like the Lightning Network and atomic swaps operating as a smart contract layer upon the BTC network.<\/p>\n<figure id=\"attachment_41282\" aria-describedby=\"caption-attachment-41282\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-41282\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/04\/bitcoin-lightning-social-300x158.jpg\" alt=\"Bitcoin Lightning Network Beta Is Now Live\" width=\"300\" height=\"158\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/04\/bitcoin-lightning-social-300x158.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/04\/bitcoin-lightning-social-768x403.jpg 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/04\/bitcoin-lightning-social-1024x538.jpg 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/04\/bitcoin-lightning-social.jpg 1200w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-41282\" class=\"wp-caption-text\">Related Story:\u00a0<a title=\"Bitcoin Lightning Network Reaches Record Node Count\" href=\"https:\/\/cryptoslate.com\/bitcoin-lightning-network-nodes\/\">Bitcoin Lightning Network Reaches Record Node Count<\/a><\/figcaption><\/figure>\n<p>These features increased usage of the platform by providing users with a reliable mechanism for low-cost exchange and payments.<\/p>\n<p>The result of these changes to the core network maintained an average transaction fee below $2 since the start of March 2018, a decrease from the record high of $55 in December 2017.<\/p>\n<p>The price of transactions may fall as service providers follow the lead of major exchanges like Binance and Coinbase, with the recent addition of cold wallet and vault provider Xapo being among other recent additions.<\/p>\n<figure id=\"attachment_56465\" aria-describedby=\"caption-attachment-56465\" style=\"width: 1024px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-56465 size-large\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/TransactionfeeC-1024x270.png\" alt=\"Bitcoin fees\" width=\"1024\" height=\"270\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/TransactionfeeC-1024x270.png 1024w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/TransactionfeeC-300x79.png 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/TransactionfeeC-768x203.png 768w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/TransactionfeeC.png 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption id=\"caption-attachment-56465\" class=\"wp-caption-text\">Bitcoin Average Transaction Fees over the past year (<a href=\"https:\/\/bitinfocharts.com\/comparison\/bitcoin-transactionfees.html\">Source<\/a>)<\/figcaption><\/figure>\n<p><a href=\"https:\/\/xapo.com\/\">Xapo<\/a>\u00a0provides an institutional-grade custodial service for Bitcoin management by giving large-scale investors secure vaults and electronic biometric verification.<\/p>\n<figure id=\"attachment_57247\" aria-describedby=\"caption-attachment-57247\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-57247\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/xapo-international-debit-card-300x150.jpg\" alt=\"\" width=\"300\" height=\"150\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/xapo-international-debit-card-300x150.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/xapo-international-debit-card.jpg 580w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-57247\" class=\"wp-caption-text\">The Xapo Wallet provides a way to manage Bitcoin funds.<\/figcaption><\/figure>\n<p>Xapo\u2019s vaults currently contain roughly 7% of total global Bitcoin supply, \u00a0placing the Swiss company as having more substantial deposits than 98% of the roughly 5,670 US banks.<\/p>\n<p>Xapo\u2019s <a href=\"https:\/\/finance.yahoo.com\/news\/bitcoin-wallet-xapo-implements-scaling-213513489.html\">recent<\/a> adoption of SegWit will enable significant amounts of Bitcoin transactions to be processed as SegWit-enabled, further decreasing costs and network burden.<\/p>\n<h2>MIT Helps to Bring BTC into the Future<\/h2>\n<p>Research taking place at MIT\u2019s Distributed Technology Initiative has <a href=\"https:\/\/www.media.mit.edu\/projects\/bitcoin-settled-dollar-futures\/overview\/\">provided<\/a> cutting-edge techniques to reduce the negative cost of scalability on the network further.<\/p>\n<figure id=\"attachment_57245\" aria-describedby=\"caption-attachment-57245\" style=\"width: 300px\" class=\"wp-caption alignleft\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-57245\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/mit-media-lab-300x166.jpg\" alt=\"MIT Media Lab\" width=\"300\" height=\"166\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/mit-media-lab-300x166.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/mit-media-lab.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-57245\" class=\"wp-caption-text\">The MIT Media Lab is an antidisciplinary research laboratory at the Massachusetts Institute of Technology, growing out of MIT's Architecture Machine Group in the School of Architecture<\/figcaption><\/figure>\n<p>The demo utilized an experimental use case for the <a href=\"https:\/\/cryptoslate.com\/bitcoin-lightning-network-nodes\/\">Lightning Network<\/a> through the functionality of SegWit with smart contracts to handle millions of transactions with a higher degree of complexity.<\/p>\n<p>By providing smart contracts with trusted data channels (oracles), the team has demonstrated a level of dynamic flexibility previously unavailable to the network.<\/p>\n<p>These trusted avenues would have the added benefit of allowing large amounts of non-integral data to be offloaded from the blockchain, decreasing the overall workload required to process and verify transactions.<\/p>\n<p>Users will be able to draw data from a range of outside sources without having to rely on a single trusted party by pulling data from a network of redundant oracles that operate under an incentivized data integrity scheme.<\/p>\n<p>Oracles allow dApps to retrieve information such as stock prices, news, and weather from publically available repositories to supplement the data-driven elements of their functionality.<\/p>\n<h2>Business Facing Bitcoin Payment Solutions on the Rise<\/h2>\n<p>Meanwhile, companies like <a href=\"https:\/\/acinq.co\/\">ACINQ<\/a> are lowering the barrier to entry for business adoption by <a href=\"https:\/\/medium.com\/@ACINQ\/introducing-strike-a-stripe-like-api-for-lightning-c84762f4f634\">developing<\/a> a Stripe-like API for the Lightning Network.<\/p>\n<figure id=\"attachment_57248\" aria-describedby=\"caption-attachment-57248\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-57248\" src=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/acinq-300x75.jpg\" alt=\"ACINQ\" width=\"300\" height=\"75\" srcset=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/acinq-300x75.jpg 300w, https:\/\/cryptoslate.com\/wp-content\/uploads\/2018\/05\/acinq.jpg 600w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-57248\" class=\"wp-caption-text\">According to its website, ACINQ is &#8220;one of the leading companies working on Bitcoin scalability.&#8221;<\/figcaption><\/figure>\n<p>The development of the payment platform, called Strike, allows for a flat fee per lightning transaction while providing web developers with a familiar framework by using API calls and listening for webhook events.<\/p>\n<h3>Stripe\u2019s digital payment platform currently <a href=\"https:\/\/www.datanyze.com\/market-share\/payment-processing\/stripe-market-share\">occupies<\/a> 18% of the market alongside industry giants like PayPal, Square, and AmazonPay.<\/h3>\n<p>Many customers have <a href=\"https:\/\/memberful.com\/blog\/stripe-vs-paypal\/\">gravitated<\/a> towards Stripe as a result of its simple fee structure, portable data management, and stable RESTful API. By enabling a similar scheme for Bitcoin transactions through Strike, ACINQ\u00a0eliminated a significant hurdle for business adoption across internet driven marketplaces.<\/p>\n<p>As SegWit usage increases to become a ubiquitous network-wide update, the ability for service providers to leverage the extended functionality of the BTC network will integral for mass adoption.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin SegWit transactions now constitute over 40% of all Bitcoin network activity as adoption continues steady growth amongst scalability concerns. Recent statistics from transactionfee.info\u00a0show that SegWit adoption has maintained robust growth as large exchanges continue to support the scalability solution. The SegWit update enabled the network to rapidly clear a backlog of pending transactions during [&hellip;]<\/p>\n","protected":false},"author":45,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[35,78564,37],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bitcoin Scalability Update: SegWit, Transaction Efficiency, and Lightning Network Implementation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/bitcoin-scalability-update-segwit-transaction-efficiency-and-lightning-network-implementation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bitcoin Scalability Update: SegWit, Transaction Efficiency, and Lightning Network Implementation\" \/>\n<meta property=\"og:description\" content=\"Bitcoin SegWit transactions now constitute over 40% of all Bitcoin network activity as adoption continues steady growth amongst scalability concerns. Recent statistics from transactionfee.info\u00a0show that SegWit adoption has maintained robust growth as large exchanges continue to support the scalability solution. 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