What is actually use of SegWit?

[Skarner21]

Hi guys this just a noob question sorry for asking it because i do not actually know what is the use of segwit.
I need some opinion or best answer if what is the actually uses of segregate witness?

I hope i can get some ideas and learn something about this Segwit added from wallets.

[mezzomix]

It's basically a fix for the transaction malleability problem.

[TastyChillySauce00]

just got this point from : https://bitcoincore.org/en/2016/01/26/segwit-benefits/

Segwit prevents third-party and scriptSig malleability by allowing Bitcoin users to move the malleable parts of the transaction into the transaction witness, and segregating that witness so that changes to the witness does not affect calculation of the txid.

and also some important points

Who benefits?

- Wallet authors tracking spent bitcoins: it’s easiest to monitor the status of your own outgoing transactions by simply looking them up by txid. But in a system with third-party malleability, wallets must implement extra code to be able to deal with changed txids.

- Anyone spending unconfirmed transactions: if Alice pays Bob in transaction 1, Bob uses that payment to pay Charlie in transaction 2, and then Alice’s payment gets malleated and confirmed with a different txid, then transaction 2 is now invalid and Charlie has not been paid. If Bob is trustworthy, he will reissue the payment to Charlie; but if he isn’t, he can simply keep those bitcoins for himself.

- The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

- Anyone using the block chain: smart contracts today, such as micropayment channels, and anticipated new smart contracts, become less complicated to design, understand, and monitor.

[Lauda]

just got this point from : https://bitcoincore.org/en/2016/01/26/segwit-benefits/
-snip-

Everything that was quoted in your post is specifically regarding the malleability fix. However, there are plenty of other benefits down below:

• Linear scaling of sighash operations
• Signing of input values
• Increased security for multisig via pay-to-script-hash (P2SH)
• Script versioning
• Reducing UTXO growth
• Efficiency gains when not verifying signatures
• Block capacity/size increase
• Moving towards a single combined block limit

Each one has been described further down in the post.

I hope i can get some ideas and learn something about this Segwit added from wallets.

Keep in mind that in order to make Segwit transactions you have to update your wallet to one that supports Segwit. [/list]

[amaclin]

• Reducing UTXO growth

really? 

[Lauda]

really?  

Just read the whole link:

Segwit improves the situation here by making signature data, which does not impact the UTXO set size, cost 75% less than data that does impact the UTXO set size. This is expected to encourage users to favour the use of transactions that minimise impact on the UTXO set in order to minimise fees, and to encourage developers to design smart contracts and new features in a way that will also minimise the impact on the UTXO set.

Because segwit is a soft-forking change and does not increase the base blocksize, the worst case growth rate of the UTXO set stays the same.

There are other ways of improving this, but those aren't technological (e.g. running some sort of *action* to raise awareness and get people to consolidate their outputs).

[amaclin]

...This is expected to encourage users to....

This is expected to encourage users to use more spam/dust/datastorage transactions.
And services like http://www.cryptograffiti.info/
So, segwit does not reduce the utxo growth.

fyi
http://statoshi.info/dashboard/db/unspent-transaction-output-set?panelId=5&fullscreen&from=1389367071369&to=1479223255583
http://statoshi.info/dashboard/db/unspent-transaction-output-set?panelId=6&fullscreen&from=1389367071369&to=1479223341652

[thejaytiesto]

It's basically a fix for the transaction malleability problem.

This is the basic explanation but it doesn't include all the cool things that come with it. After fixing transaction malleability problem, then we can have all the stuff we ever dreamed with, like faster transactions, side chains, schnorr signatures, confidential transactions, and a lot of other cool stuff that will help push bitcoin to the next level.

[Ayers]

It's basically a fix for the transaction malleability problem.

and the problem about the block size, and effective 2MB, and the transaction that are stuck because of the limit, but until it is activated this will not work i guess

[mummybtc]

Segwit is going to help  Bitcoin scaling, initially it is going to up the block size by 0.75mb and will also enable other projects like Rootstock and sidechains on Bitcoin blockchain

[Skarner21]

It's basically a fix for the transaction malleability problem.

This is the basic explanation but it doesn't include all the cool things that come with it. After fixing transaction malleability problem, then we can have all the stuff we ever dreamed with, like faster transactions, side chains, schnorr signatures, confidential transactions, and a lot of other cool stuff that will help push bitcoin to the next level.

This is more easy to undestand than the lauda's post it is hard for me to understand more about bitcoin since i still not experience to use segwit..
But let me know if electrum has also segwit feature or this is only for bitcoin-qt..
upon checking the electrum download i do not see any segwit added in their wallet.

[cjmoles]

It's basically a fix for the transaction malleability problem.

This is the basic explanation but it doesn't include all the cool things that come with it. After fixing transaction malleability problem, then we can have all the stuff we ever dreamed with, like faster transactions, side chains, schnorr signatures, confidential transactions, and a lot of other cool stuff that will help push bitcoin to the next level.

I've been dreaming about smart contracts!  Will smart contracts be easier to implement in the new client, or will they still only be available to those who possess a Phd in cryptography?  Is SegWit taking a step in that direction, or taking a step back from that possibility?

[achow101]

It's basically a fix for the transaction malleability problem.

This is the basic explanation but it doesn't include all the cool things that come with it. After fixing transaction malleability problem, then we can have all the stuff we ever dreamed with, like faster transactions, side chains, schnorr signatures, confidential transactions, and a lot of other cool stuff that will help push bitcoin to the next level.

This is more easy to undestand than the lauda's post it is hard for me to understand more about bitcoin since i still not experience to use segwit..
But let me know if electrum has also segwit feature or this is only for bitcoin-qt..
upon checking the electrum download i do not see any segwit added in their wallet.

Electrum is working on it. See https://twitter.com/ElectrumWallet/status/790127984552382464

You can visit https://bitcoincore.org/en/segwit_adoption/ to see the current status of segwit adoption.

[TKeenan]

SegWit is used to fix the network so Lightning can be attached later.  Lightning allows you to pay Blockstream for transactions rather than the miners.

[Lauda]

SegWit is used to fix the network so Lightning can be attached later.  Lightning allows you to pay Blockstream for transactions rather than the miners.

Wrong. Lightning Network is open source, thus can be implemented by anyone. You are may be talking about Lightning Hubs which can be run by anyone. There are currently several different teams working on this, i.e. several different implementations.

[achow101]

SegWit is used to fix the network so Lightning can be attached later.  Lightning allows you to pay Blockstream for transactions rather than the miners.

Please stop with the FUD. Lightning is not just being developed by Blockstream. There are already multiple implementations of Lightning made by multiple different teams, only one of which is Blockstream.

Furthermore segwit is more than just a fix for Lightning. It provides much more uses and fixes which have already been discussed in this thread and elsewhere.

[kiklo]

Furthermore segwit is more than just a fix for Lightning. It provides much more uses and fixes which have already been discussed in this thread and elsewhere.

Segwit makes it easier to track your Transactions.

SegWit : Makes it So a LN Node does not have to run a full Bitcoin node
The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

Simply put SegWit will make it possible to Steal BTC Value to use in LN Alternative Payment System using BTC IOUs .
Miners will lose money because LN can decrease the number of OnChain Transactions.
(In Theory : Using advanced features LN may even allow only certain miners to process the transaction Fees when Onchain BTC Transactions are required.)
(Giving LN Nodes the ability to starve miners not in Collusion with them of transaction fees. )  

LN=Bank

 

[mikewirth]

Simply put SegWit will make it possible to Steal BTC Value to use in LN Alternative Payment System using BTC IOUs .
Miners will lose money because LN can decrease the number of OnChain Transactions.
(In Theory : Using advanced features LN may even allow only certain miners to process the transaction Fees when Onchain BTC Transactions are required.)

The only thing LN does is limit fees for miners and give those fees to owners of Lightning Network (Blockstream)

[achow101]

Segwit makes it easier to track your Transactions.

In what way? The way that inputs and outputs work are still exactly the same.

SegWit : Makes it So a LN Node does not have to run a full Bitcoin node

How so? An LN Node doesn't need to be a full Bitcoin node already. They can work fine as SPV wallets now and after Segwit. Segwit does not change that at all.

The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

What requires a Lightning client to be a full node? As I understand it, it doesn't matter, and segwit does not change that.

Simply put SegWit will make it possible to Steal BTC Value to use in LN Alternative Payment System using BTC IOUs .

I don't think you understand how LN works. LN does not issue IOUs. It creates very real, valid, and broadcastable Bitcoin transactions. There are no IOUs involved.

Miners will lose money because LN can decrease the number of OnChain Transactions.

Not necessarily. LN is not for every type of transaction. It is really only good for small, repeated transactions like faucet payments.

(In Theory : Using advanced features LN may even allow only certain miners to process the transaction Fees when Onchain BTC Transactions are required.)
(Giving LN Nodes the ability to starve miners not in Collusion with them of transaction fees. )  

Now that is just FUD. How would LN only allow certain miners to confirm those transactions? That is just completely false.

The only thing LN does is limit fees for miners and give those fees to owners of Lightning Network (Blockstream)

Blockstream does not own the Lightning Network. LN is an open source spec that is being implemented by multiple teams, it has not owner nor controller.

Regardless, discussing LN in this thread is off topic.


You are demonstrating and extreme lack of knowledge on subjects you are arguing against. I highly suggest that you actually do some research before posting.

Please stop spreading FUD.

[kiklo]

In by Case , By FUD
F  = FACTS
U  = UNSUNG
D   = DEBUNK
 

Segwit makes it easier to track your Transactions.

In what way? The way that inputs and outputs work are still exactly the same.

Reference : https://bitcoincore.org/en/2016/01/26/segwit-benefits/

Wallet authors tracking spent bitcoins: it’s easiest to monitor the status of your own outgoing transactions by simply looking them up by txid. But in a system with third-party malleability, wallets must implement extra code to be able to deal with changed txids.

SegWit : Makes it So a LN Node does not have to run a full Bitcoin node

How so? An LN Node doesn't need to be a full Bitcoin node already. They can work fine as SPV wallets now and after Segwit. Segwit does not change that at all.

Reference: https://bitcoincore.org/en/2016/01/26/segwit-benefits/
The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

What requires a Lightning client to be a full node? As I understand it, it doesn't matter, and segwit does not change that.

Yo Dum Dum , same answer as above.  
Reference: https://bitcoincore.org/en/2016/01/26/segwit-benefits/
The Lightning Network: with third-party and scriptSig malleability fixed, the Lightning Network is less complicated to implement and significantly more efficient in its use of space on the blockchain. With scriptSig malleability removed, it also becomes possible to run lightweight Lightning clients that outsource monitoring the blockchain, instead of each Lightning client needing to also be a full Bitcoin node.

Simply put SegWit will make it possible to Steal BTC Value to use in LN Alternative Payment System using BTC IOUs .

I don't think you understand how LN works. LN does not issue IOUs. It creates very real, valid, and broadcastable Bitcoin transactions. There are no IOUs involved.

Do you not understand the Word OFFCHAIN , BTC is only Locked on the ONLINE BLOCKCHAIN, it is not and can not be moved onto LN's network,
So you are trading BTC IOUs when you use LN.

Miners will lose money because LN can decrease the number of OnChain Transactions.

Not necessarily. LN is not for every type of transaction. It is really only good for small, repeated transactions like faucet payments.

LN will cost the Miners money , that is why less than 30% have been dumb enough to agree to it.

(In Theory : Using advanced features LN may even allow only certain miners to process the transaction Fees when Onchain BTC Transactions are required.)
(Giving LN Nodes the ability to starve miners not in Collusion with them of transaction fees. )  

Now that is just FUD. How would LN only allow certain miners to confirm those transactions? That is just completely false.

One of the Concerns in the LN Network Whitepaper is that ,
Miners may Decline Certain LN transactions so their Locks timeout and the BTC can be Stolen.
If the above is possible, the reverse is also possible which makes what I said a Valid Theory.


You are demonstrating and extreme lack of knowledge on subjects you are arguing against. I highly suggest that you actually do some research before posting.

Please stop spreading FUD.

Here is some research for you , and it admits Funds can & will be Stolen by people using LN.
(Looks like the only one spreading BS, is you achow101.)
Reference: https://lightning.network/lightning-network-paper.pdf

9    Risks
The primary risks relate to timelock expiration.  Additionally, for core nodes
and possibly some merchants to be able to route funds, the keys must be
held online for lower latency.  However, end-users and nodes are able to keep
their private keys  rewalled o  in cold storage.
9.1    Improper Timelocks
Participants must choose timelocks with suffcient amounts of time.
If insuffcient time is given, it is possible that timelocked transactions believed to
be invalid will become valid, enabling coin theft by the counterparty.
There is a trade-off  between longer timelocks and the time-value of money.
When writing wallet and Lightning Network application software, it is necessary
to ensure that suffcient time is given and users are able to have their trans-actions
enter into the blockchain when interacting with non-cooperative or malicious channel counterparties.

9.2    Forced Expiration Spam
Forced expiration of many transactions may be the greatest systemic risk when using the Lightning Network.  
If a malicious participant creates many channels and forces them all to expire at once, these may overwhelm block data capacity,
forcing expiration and broadcast to the blockchain.  The re-sult  would  be  mass  spam  on  the  bitcoin  network.  
The  spam  may  delay transactions to the point where other locktimed transactions become valid.
This may be mitigated by permitting one transaction replacement on
all  pending  transactions.   Anti-spam  can  be  used  by  permitting  only  one
transaction replacement of a higher sequence number by the inverse of an
even or odd number.  For example, if an odd sequence number was broad-
cast, permit a replacement to a higher even number only once.  Transactions
would use the sequence number in an orderly way to replace other trans-
actions.   This  mitigates  the  risk  assuming  honest  miners.
This attack  is extremely  high  risk,  as  incorrect  broadcast  of  Commitment  Transactions entail a full penalty of all funds in the channel.
Additionally,
one may attempt to steal HTLC transactions by forcing a timeout transaction to go through when it should not.
This can be easily mitigated by having each transfer inside the channel be lower than the total
transaction fees used.  Since transactions are extremely cheap and do not
hit the blockchain with cooperative channel counterparties, large transfers
of value can be split into many small transfers.  This attempt can only work
if  the  blocks  are  completely  full  for  a  long  time.   While  it  is  possible  to
mitigate it using a longer HTLC timeout duration, variable block sizes may
become common, which may need mitigations.
If this type of transaction becomes the dominant form of transactions which are included on the blockchain,
it may become necessary to increase the  block  size  and  run  a  variable  blocksize  structure  and  timestop   ags as described in the section below.
This can create suffcient penalties and
disincentives  to  be  highly  unpro table  and  unsuccessful  for  attackers,  as
attackers lose all their funds from broadcasting the wrong transaction,  to
the point where it will never occur.

9.4    Data Loss
When one party loses data, it is possible for the counterparty to steal funds.
This can be mitigated by having a third party data storage service where
encrypted data gets sent to this third party service which the party cannot
decrypt.   Additionally,  one  should  choose  channel  counterparties  who  are
responsible  and  willing  to  provide  the  current  state,  with  some  periodic
tests of honesty.
9.5    Forgetting to Broadcast the Transaction in Time
If one does not broadcast a transaction at the correct time, the counterparty may steal funds.
This can be mitigated by having a designated third party
to send funds.  An output fee can be added to create an incentive for this
third party to watch the network.  Further,  this can also be mitigated by
implementing OP CHECKSEQUENCEVERIFY