BitPay, the crypto payment processor, now supports segregated witness (SegWit), according to a post on the corporate page. “SegWit support is currently an optional feature for Bitcoin wallets in the BitPay app.
By the end of the year, SegWit will be a default feature for as part of a phased implementation plan invest in all Bitcoin wallets. In addition, SegWit will be implemented for invoice payments, "says the post.
The decision came three years after the company opposed the update in favor of the SegWit2x alternative solution. The struggle for SegWit against SegWit2x has fractured the Bitcoin community.
The dispute turned into a kind of civil war between Bitcoin supporters that saw industrial deals behind closed doors, the launch of the rival Bitcoin Cash project and the incident with Bitcoin developer Jameson Lopp. BitPay regularly processes approximately $ 1 billion in annual payments. The company processed 100.718 payments in April 2020, of which 91,93% were bitcoin (BTC) transactions.
SegWit revisited
SegWit was first proposed in 2015 by Bitcoin Core collaborator Pieter Wuille and has quickly become a trigger point for the developer community. In essence, SegWit has freed up space on the block without increasing the block size to keep the Bitcoin blockchain small.
It also eliminated a vulnerability called transaction malleability that allowed manipulation of transaction signatures. Removing this vulnerability was a necessary condition for developing an experimental payment platform on Bitcoin, the Lightning Network.
At the time, BitPay was joined by most of the bitcoin and mining pool companies such as Bitmain, Digital Currency Group (DCG) and Coinbase in supporting the rival update SegWit2x. SegWit2x would implement SegWit also doubling the bitcoin block size from 1 mb to 2 mb.
The competition between different views on the size of the Bitcoin block has led to the creation of Bitcoin Cash. Fans of the small blocks say they make the network stronger against attacks; advocates of the larger blocks say they are needed if bitcoin ever takes off as a currency.
The SegWit2x project failed largely due to a SegWit User Activated Soft Fork (USAF) deployed on the network in August 2017. As of June 29, 2020, 63% of daily bitcoin payments used SegWit.
What time?
Sean Rolland, director of BitPay, said that this was "a good time" for adoption based on trader feedback. SegWit reduces transaction sending costs by up to 30%, says the post BitPay.
The company also implemented a commission estimate with the new update capable of "reducing commissions by 5% - 10% compared to previous versions". Not adding SegWit or other "batch techniques" of transactions, as they are commonly known, makes everyone pay more to process transactions.
A report released by an independent blockchain analyst in May reported that BitMEX, the crypto derivatives platform, increased the average commission of the entire network by transmitting transactions without SegWit.
