Bitcoin reached a crucial technical and political milestone this week, locking in the long-debated code change Segregated Witness (SegWit).
The milestone, advocates hope, will provide a much-needed transaction capacity boost and â longer-term â open doors for more impactful scaling technologies.
But the idea saw its fair share of contention on its way to lock-in. While it aroused grassroots support from users who arguably helped push it through, it also attracted critics who were serious enough to split from bitcoin and form a new cryptocurrency that excluded it completely.
So, what will happen when the code change goes live? Weâre not without examples of what we can expect.
After some contentious back-and-forth between miners and users, litecoin, the fourth largest public blockchain network, was able to push through SegWit three months ago. As such, many believe litecoin, a fork of bitcoinâs code, can act as a test platform for SegWit, providing real-world insight into adoption hurdles.
Hereâs what those close to the project have to say about the results:
Arguably the most important takeaway is that SegWit hasnât led to any problems on the litecoin network itself â as of mid-June, the Litecoin Foundation reported there have been âno issues.â
This is notable given the amount of controversy the change has created within the bitcoin ecosystem.
Some critics argued SegWit was too complex and put the network at risk. For instance, it was suggested that if SegWit was activated (and certain other changes were made to bitcoin in the future), miners would be able to steal the coins from certain types of addresses.
The claim was put to the test on the litecoin network, though, with one user creating a $1 million-worth of litecoin âbountyâ using a SegWit address. Attached was also a note that read, âLetâs see if segwit really is âanyone-can-spendâ or not.â
So far, no one has claimed the litecoin in the contract.
Litecoin Foundation directors Xinxi Wang and Franklyn Richards have both admitted there havenât been many SegWit transactions across the network to date.
Although, the directorsâ sentiments are without precise measurements.
University of Freiburg computer science researcher Jochen Hoenicke explained the measurement challenges in this way â while you can label a transaction a SegWit transaction if itâs sent âfromâ a SegWit-enabled wallet, you canât if the transaction is only sent âtoâ a SegWit-enabled wallet.
Put another way, transactions sent to SegWit-enabled wallets look identical to another complex transaction type, meaning they canât be monitored.
As such, Heonicke has compiled a list of litecoin SegWit transactions sent from wallets that support the new transaction type. According to his data, roughly 100 out of 10,000 total transactions per day are SegWit transactions.
And while Heonicke recognizes the list is incomplete because of the discrepancy in how transactions can be measured, heâs noticed one trend.
âThe number is increasing as support rises,â he said, pointing to hardware wallet Trezorâs announcement on June 7 that it was adding SegWit as its default transaction type. After that, he said, there was a noticeable jump (from nearly zero to double digits) in the number of litecoin SegWit transactions happening per day.
And as litecoin wallets and exchanges take the steps to support the code change, more SegWit transactions are likely to follow. According to Richards, other wallets, such as LoafWallet, are making progress on a SegWit upgrade.
In contrast, many bitcoin wallets already support SegWit, as theyâve been anticipating the change for over a year, so itâs likely bitcoin will see more use of the feature.
Richards also argued there are important differences between litecoin and bitcoin that make SegWit less crucial for its operation. Namely litecoin doesnât have the same high transaction volume.
âThe scaling part of SegWit was predominantly for bitcoin to try and alleviate its network congestion, something that litecoin does not suffer from,â Richards told CoinDesk.
Litecoin companies then donât feel the same urgency to update their software to support the change.
âBut I foresee that SegWit will probably be used extensively on bitcoin immediately after activation,â Wang remarked.
Adoption metrics aside, Hoenicke pointed to some other âminorâ technical issues.
Because of a bug in the mobile litecoin wallet Electrum-LTC, old versions of the software would âbreakâ when users sent a SegWit transaction to the wallets.
Hoenicke noted another problem that, while specific to litecoin, highlights user confusion when things are changed around. Since litecoin is in the process of phasing in a new address type, some users needed to convert between the two types.
âSome accidentally sent bitcoins to their litecoin SegWit address after using the conversion tool and now have to wait for SegWit to activate on bitcoin,â Hoenicke said.
While these are problems facing specific businesses and users, bad user experiences could cause discontent in the bitcoin community, especially since thereâs already been a long struggle over the change.
Bitcoin and litecoin image via Shutterstock