Post your SegWit questions here - open discussion - big week for Bitcoin!

[Sonellion]

Even if an entity does not support SegWit they may prepare for SegWit in the event that it becomes part of Bitcoin despite their wishes.

Segwit is backwards compatible. If you don't like segwit, you can continue to use Bitcoin as you do now with almost zero impact on you.

There are now two transaction formats - legacy and segwit. 

A node that doesn't support segwit will receive transactions in the legacy format.  These transactions will not have the witness data, thus no signatures or public keys.  This works because the witness program allows anybody to spend the output.  A node that supports segwit will not accept a legacy transaction that attempts to spend an output using a witness program.  Thus the need to get 95% of the miners to support segwit.

doesn't this mean you can't do a rescan any longer if you're stuck with old version after segwit, the old version doesn't know  who is really allowed to spend the output?

[1715009451]

1715009451

[Carlton Banks]

doesn't this mean you can't do a rescan any longer if you're stuck with old version after segwit, the old version doesn't know  who is really allowed to spend the output?

Nope, those using older clients will be creating legacy format transactions, and those transactions will be stored in the original block structure when mined.

[Barbut]

My question is how to explain segwit with using simple words, there is many technical analysis, explanations. Here in thread people mostly talk about supporting segwit and how to support it, will wallet's be updated for segwit.
My question is simple, what is SegWit, what this actually do? What we can gain with using SegWit? Is there some simple explanation for all this questions?

[Carlton Banks]

My question is simple, what is SegWit, what this actually do? What we can gain with using SegWit? Is there some simple explanation for all this questions?

Bitcoin transactions are like cheques: they need to be signed by the person who owns the bank account that the cheque is made from.

Bitcoin transactions do not accept handwritten signatures, however. They use digital signatures.



So.... the signature for a Bitcoin transaction can be (and are) used for multiple purposes. One purpose is to provide input to the calculation that creates the transaction ID number. This is a number that's used to quickly distinguish one transaction from another by the Bitcoin software.

The Bitcoin txid shares that characteristic with Bitcoin signatures: they can be used for different purposes apart from their basic purpose (serving as a unique identifier for transactions). Or I should say could be used. There is a problem. A bug.


The bug is that different signatures can be used for the exact same transaction. This is called "signature malleation". All versions of a given transaction are equally valid, miners accept them all.

And so, the problem is this: if one tries to use the txid for some other purpose, there is a risk that an attacker on the Bitcoin network could try to get a different version of your transaction (with an alternative signature) into the blockchain. If you're only sending a regular transaction without anything sophisticated that needs the txid and/or the signature to be what you intended, that's fine, and that's what Bitcoin has been like since the beginning.

But people have devised smart ways to use the txid for something else: Lightning being the obvious example. So......


Segwit takes the blocks and separates (segregates) the transaction data from the signature (witness) data. This prevents all remaining signature malleability attacks (there were other attacks that were fixed in previous soft forks). And that opens the door to all "2nd layer" Bitcoin networks, including Lightning, plus any currently unknown ideas that make use of un-malleable txid or signatures.

[Temp_JayJuanGee]

My question is how to explain segwit with using simple words, there is many technical analysis, explanations. Here in thread people mostly talk about supporting segwit and how to support it, will wallet's be updated for segwit.
My question is simple, what is SegWit, what this actually do? What we can gain with using SegWit? Is there some simple explanation for all this questions?

I don't claim to be any kind of expert either or even to know if important points are being left out of any kind of explanation... Nonetheless, I thought that the below linked about 11 minute video was decently basic, in regards to Seg wit.

https://www.reddit.com/r/btc/comments/5eambr/segregated_witness_explained_with_thanks_to_luke/

[TransaDox]

How much easier or harder does SegWit make transaction data mining and address tracking?

[achow101]

How much easier or harder does SegWit make transaction data mining and address tracking?

Not at all. Segwit does not make it any harder or any easier to track spends.

[Fatman3001]

What's plan b if segwit doesn't get adopted?

sry if repost

[Carlton Banks]

What's plan b if segwit doesn't get adopted?

sry if repost

It doesn't exist yet, but I would suggest coming up with a different way to eliminate signature malleability. I doubt it will come to that in any case, the controversy is purely the invention of the trolls, no-one with any real stake in the network opposes it, as it's just common sense engineering.

[Fatman3001]

What's plan b if segwit doesn't get adopted?

sry if repost

It doesn't exist yet, but I would suggest coming up with a different way to eliminate signature malleability. I doubt it will come to that in any case, the controversy is purely the invention of the trolls, no-one with any real stake in the network opposes it, as it's just common sense engineering.

"no-one with any real stake in the network opposes it" - that one left me a bit confused, but thx for the answer

[Carlton Banks]

"no-one with any real stake in the network opposes it" - that one left me a bit confused, but thx for the answer

The pools who have come out against Segwit have apparently seen declining hashrate. They had 8% before that. You do the math.

[TransaDox]

How much easier or harder does SegWit make transaction data mining and address tracking?

Not at all. Segwit does not make it any harder or any easier to track spends.

But isn't transaction malleability a barrier to tracking? So much so that exchanges can't keep account and therefore want SegWit to remove that barrier?

[achow101]

How much easier or harder does SegWit make transaction data mining and address tracking?

Not at all. Segwit does not make it any harder or any easier to track spends.

But isn't transaction malleability a barrier to tracking? So much so that exchanges can't keep account and therefore want SegWit to remove that barrier?

No. Transaction malleability is a barrier to a different type of tracking, tracking when a transaction for a deposit confirms. This is for exchanges and services since they usually track when a transaction confirms so that they can credit the account. Usually they look for a specific txid in a block, but if a transaction was malleated and the malleated transaction was included in the block, the Bitcoin was still paid but the service does not know that since they were not looking for the malleated transaction. The service would not know of the malleated transaction because their node would reject it as a double spend.

[Quickseller]

My question is, how can a non-mining entity that is part of the Bitcoin economy and/or ecosystem show their support/non-support of SegWit?

The best thing a non-miner can do to support the network and signal their support for SegWit would be to run Bitcoin Core 0.13.1.  You can see that currently 30% of the nodes on the network are running 0.13.1.
https://bitnodes.21.co/nodes/

You could also find a site that offers a voting mechanism to make your opinion heard.  Here's one for example: https://vote.bitcoin.com/arguments/segregated-witness-is-a-good-short-term-approach-to-scaling-bitcoin-capacity

Currently, 52 of the last 300 blocks (17%) signaled SegWit support, and 32 of the last 142 blocks (23%).  You can monitor progress here:
https://data.bitcoinity.org/bitcoin/block_version/7d?c=block_version&t=a

It is possible for one person or entity to rent several VPSs and run a full node that runs Core 13.1 (or some other version of Bitcoin), so while counts of various types of nodes does mean something, it doesn't necessarily reflect the overall support of the community.

I am really looking for the opinions of major Bitcoin companies such as Coinbase, BipPay, Circle, major exchanges, gambling sites, and others. Do they wish for SegWit to be implemented, do they wish for SegWit to not be implemented, are they neutral?

It would not be smart to not implement SegWit if/when it becomes part of the mainnet.

Why? Segwit brings many improvements to Bitcoin that we need, including scaling. Many wallets have or are in the process of implementing segwit.

I agree that SegWit allows for a greater number of transactions in a block, but I don't think it is the most optimal way to achieve this. I am not sure how serious other problems that SegWit "fixes" really are for Bitcoin, especially malleability

Wallet software is being changed to implement SegWit because the creators of such software believe that SegWit will likely be implemented, not necessarily because they believe SegWit is what is best for Bitcoin. If it was apparent that Bitcoin was about to HF to have a maximum block size of 2 MB, then wallet providers would likely also be in the process of upgrading their software to support this.

Some Bitcoin companies may however not "support" SegWit and would prefer that it not be implemented. My question is, how can a non-mining entity that is part of the Bitcoin economy and/or ecosystem show their support/non-support of SegWit?

Nodes that signal segwit have the NODE_WITNESS service bit set. So to check if a node supports segwit, just check for that service bit.

Even if I know that a particular node is run by coinbase (for example), the fact that this node 'supports' SegWit, does not necessarily mean that coinbase supports SegWit. If SegWit does in fact get implemented into the Bitcoin network, then coinbase (in this example) will want to have prepared for, and tested SegWit sufficiently.

Even if an entity does not support SegWit they may prepare for SegWit in the event that it becomes part of Bitcoin despite their wishes.

Segwit is backwards compatible. If you don't like segwit, you can continue to use Bitcoin as you do now with almost zero impact on you.

My understanding is that if a node does not upgrade, then it does not have a way to validate that a transaction is valid (due to being unable to validate the transactions signature), and does not have any way to validate that a block that contains one or more SegWit transactions is valid. Am I right about this, or is this not accurate?

If the above is accurate, then I think you are using a very specific definition of "backwards compatible" to make your statement.

[Carlton Banks]

My understanding is that if a node does not upgrade, then it does not have a way to validate that a transaction is valid (due to being unable to validate the transactions signature), and does not have any way to validate that a block that contains one or more SegWit transactions is valid. Am I right about this, or is this not accurate?

If the above is accurate, then I think you are using a very specific definition of "backwards compatible" to make your statement.

Your understanding is flawed.

Segwit transactions will appear to pre-13.1 nodes as ANYONECANPAY. That's why they will be able to validate Segwit blocks without being able to understand Segwit. This is how any soft forks in the past that alter signature interpretation have handled it, and the mechanism has been in Bitcoin either since the beginning or from very early on.

[achow101]

I agree that SegWit allows for a greater number of transactions in a block, but I don't think it is the most optimal way to achieve this. I am not sure how serious other problems that SegWit "fixes" really are for Bitcoin, especially malleability

Segwit introduces a lot of other changes as well. It makes the sighashing linear instead of quadratic. Additionally the sighashing includes additional information that helps with cold storage and hardware wallets which are not connected to the internet. This allows those offline wallets to also verify transactions before signing, something that hardware wallet vendors (at least 1 that I know of) have indicated is something that the want.

Wallet software is being changed to implement SegWit because the creators of such software believe that SegWit will likely be implemented, not necessarily because they believe SegWit is what is best for Bitcoin. If it was apparent that Bitcoin was about to HF to have a maximum block size of 2 MB, then wallet providers would likely also be in the process of upgrading their software to support this.

While that is true, there are also many wallet vendors who do also believe that segwit is the way to go. In fact, those that don't think segwit is best don't need to implement segwit (and probably aren't going to).

My understanding is that if a node does not upgrade, then it does not have a way to validate that a transaction is valid (due to being unable to validate the transactions signature), and does not have any way to validate that a block that contains one or more SegWit transactions is valid. Am I right about this, or is this not accurate?

If the above is accurate, then I think you are using a very specific definition of "backwards compatible" to make your statement.

No, you are incorrect. Non-upgraded nodes do not suddenly just stop validating transactions and are suddenly unable to validate transactions. They still fully validate all transactions and blocks to the best of their ability. This means that transaction hashes are still checked, the merkle root is still checked, signatures of legacy transactions are checked, inputs and referenced outpoints are checked, etc. Non-upgraded nodes still check and validate nearly everything in a segwit transaction. The only thing that they are unable to do is to check the signatures for segwit transactions. In that case, the wallet relies on miners on having done so and it waits for confirmations for segwit transactions before accepting them. This is no different from other soft forks.

[Dahhi]

Will the blockchain develop to a stage that people who do not use segwit will not be able to transact through any other means i.e legacy transactions become obsolete?

[achow101]

Will the blockchain develop to a stage that people who do not use segwit will not be able to transact through any other means i.e legacy transactions become obsolete?

No.

[Quickseller]

Wallet software is being changed to implement SegWit because the creators of such software believe that SegWit will likely be implemented, not necessarily because they believe SegWit is what is best for Bitcoin. If it was apparent that Bitcoin was about to HF to have a maximum block size of 2 MB, then wallet providers would likely also be in the process of upgrading their software to support this.

While that is true, there are also many wallet vendors who do also believe that segwit is the way to go. In fact, those that don't think segwit is best don't need to implement segwit (and probably aren't going to).

If SegWit is implemented into Bitcoin, then anyone who does not use SegWit is going to have to pay a premium in TX fees when compared to users who do use SegWit, so to the extent that SegWit is implemented into Bitcoin, using SegWit is beneficial to the user of Bitcoin (this is not the same as saying that SegWit is what is best for Bitcoin).

You are correct to say that some wallet providers (and other bitcoin services as well) might think that SegWit is what is best for Bitcoin. My question is, has anyone attempted to ask the "official" opinion of major bitcoin services regarding their stance of SegWit? The success of most major bitcoin related services is generally aligned with the success of Bitcoin.

My understanding is that if a node does not upgrade, then it does not have a way to validate that a transaction is valid (due to being unable to validate the transactions signature), and does not have any way to validate that a block that contains one or more SegWit transactions is valid. Am I right about this, or is this not accurate?

If the above is accurate, then I think you are using a very specific definition of "backwards compatible" to make your statement.

No, you are incorrect. Non-upgraded nodes do not suddenly just stop validating transactions and are suddenly unable to validate transactions. They still fully validate all transactions and blocks to the best of their ability. This means that transaction hashes are still checked, the merkle root is still checked, signatures of legacy transactions are checked, inputs and referenced outpoints are checked, etc. Non-upgraded nodes still check and validate nearly everything in a segwit transaction. The only thing that they are unable to do is to check the signatures for segwit transactions. In that case, the wallet relies on miners on having done so and it waits for confirmations for segwit transactions before accepting them. This is no different from other soft forks.

While I do concede that after a soft fork, a node may not know that a particular transaction is invalid, I think that this is not quite the same with SegWit. For example, if a soft fork that invalidated any transaction after block n that is signed with (/contains?) a "high" s-value, then a node that has not upgraded might receive a transaction with a high s-value and not reject said transaction -- however said transaction would be a valid transaction prior to block n, and the soft fork. I would think that much of the time, a sender of these kinds of invalid transactions would have made an honest mistake (although there are some exceptions to this), and the receiver could ask the sender to resend the transaction after sufficient time has passed and has not confirmed. What I believe the difference is that someone could send a SegWit transaction to a non-SegWit node that was never valid, but the node would treat said transaction as if it were valid.

I do have another SegWit related question:

If someone who has not upgraded to SegWit receives a SegWit transaction, are they able to spend outputs from said transaction?

[Wind_FURY]

Is it true that if Segwit gets activated that Bitcoin addresses will start with "3" than the normal "1"? How are we going to be forced to make the switch with the most hassle free way possible?