The much anticipated upgrade to the Bitcoin Core chain has so far provided no benefit with segregated witnesses (segwit) finding almost no usage at all, below 0.1% of all transactions.
Many blocks contain 0 segwit transactions, with nearly all having 1 or 2 at most out of around 2,000 transactions per block. Very occasionally, it may contain 6 with the one-off highest we’ve seen at just 12.
This is somewhat unexpected because Bitcoin Core told everyone some 80 companies were ready for segwit. That includes exchanges like Bitfinex, BTCC, Blockchain.info and others.
That, however, is clearly not the case because if they were segwit ready we would be seeing a lot more transactions than the current insignificant number.
The fact they aren’t indicates almost no one has modified their infrastructure. That includes strong segwit/small block supporters.
However, the first bigger than 1MB block has been mined in Bitcoin Core. Its size is just 32 KB higher than 1MB despite considerable backlog.
The current transaction queue stands at 90MB with more than 75,000 unconfirmed transactions at the time of writing. Yet Bitcoin Core blocks remain tiny.
Bitcoin Core did not make it clear prior to segwit’s activation that capacity would take many months to increase even after the “upgrade” has gone live.
Now, Blockstream employee Mark Friedenbach says: “The mempool will always be full. Get used to it.” The mempool being the transaction queue which, if full, means there is a backlog and very high fees.
Now they are saying this is the new normal, but they did not say so prior to segwit’s activation, which raises the question of whether the Lightning Network (LN) will be a similar flop too.
LN is taunted as the solution to everything, just as segwit was. But we are seemingly finding out that segwit isn’t solving anything as far as end users are concerned with everyone being told fees of nearly $10 is the new normal in Bitcoin Core. Will LN be the same?
Big blockers argue so, for many reasons. They compare it to pre-paid debit cards, which means it will probably be very inconvenient, therefore finds little adoption, just as with segwit.
Moreover, many, even big blockers, thought segwit would at least provide some capacity, doubling the 1MB to around 2MB. That it is providing as good as none is very surprising and even shocking.
Will LN have a likewise surprise in store? That’s to be seen. Because with all the cards now revealed, words giving way to actual products, everyone free to see for themselves the end effects and plenty of choices around, including the chain-split hardfork Bitcoin Cash, we might say the “debate” has given way to the free market.