Segwit and Lightning Network help

[very_452001]

Hi,

Understand bitcoin fees are still expensive. However if there was a mass wide segwit adoption over lets say 90% then how much roughly cheaper fees will be then? Even with mass segwit adoption will the network still be congested and will fees go back to high?

Secondly does Lightning Network requires segwit implementation first or can I make a LN transaction without segwit? Basically is LN independant from segwit?

[HeRetiK]

Hi,

Understand bitcoin fees are still expensive. However if there was a mass wide segwit adoption over lets say 90% then how much roughly cheaper fees will be then? Even with mass segwit adoption will the network still be congested and will fees go back to high?

According to blockchain.info there's currently just short of 300,000 BTC transactions being handled per day, with roughly 160,000 BTC transactions being stuck in the mempool. If someone flipped a switch and all of a sudden 90% of transaction were to be SegWit transactions, close to doubling the current possible transaction throughput, those stuck transactions were gone within a day and every transaction that followed would have little trouble getting confirmed, even with a low fee. In 2015 miners earned only about a 1/50 in transactions fees of what they earn today, so my educated guess would be that transaction fees would be only 1/50 of what they are today.

Keep in mind however that even with 90% segwit adoption, given the current growth of transactions, we'd be looking at the same problem again in about 2-3 years time. So scaling solutions such as Lightning Network are required in the long term.

Secondly does Lightning Network requires segwit implementation first or can I make a LN transaction without segwit? Basically is LN independant from segwit?

In theory you could use Lightning Network without SegWit, given a transaction malleability fix. In practice, such a fix currently only exists with SegWit, so right now SegWit is required for Lightning transactions.

[very_452001]

Hi,

Understand bitcoin fees are still expensive. However if there was a mass wide segwit adoption over lets say 90% then how much roughly cheaper fees will be then? Even with mass segwit adoption will the network still be congested and will fees go back to high?

According to blockchain.info there's currently just short of 300,000 BTC transactions being handled per day, with roughly 160,000 BTC transactions being stuck in the mempool. If someone flipped a switch and all of a sudden 90% of transaction were to be SegWit transactions, close to doubling the current possible transaction throughput, those stuck transactions were gone within a day and every transaction that followed would have little trouble getting confirmed, even with a low fee. In 2015 miners earned only about a 1/50 in transactions fees of what they earn today, so my educated guess would be that transaction fees would be only 1/50 of what they are today.

Keep in mind however that even with 90% segwit adoption, given the current growth of transactions, we'd be looking at the same problem again in about 2-3 years time. So scaling solutions such as Lightning Network are required in the long term.

Secondly does Lightning Network requires segwit implementation first or can I make a LN transaction without segwit? Basically is LN independant from segwit?

In theory you could use Lightning Network without SegWit, given a transaction malleability fix. In practice, such a fix currently only exists with SegWit, so right now SegWit is required for Lightning transactions.

Ok so there's no need for lightning network now until for another 2-3 years?

Will there be soon another malleability fix soon without segwit?

I hear that lightning network coming out this year 2018, why is that when I don't see the point of it when segwit isn't even widely adopted first yet.

[HeRetiK]

Ok so there's no need for lightning network now until for another 2-3 years?

...is what I would say if SegWit were widely used, Lightning Network could be activated by the flick of a switch and transaction growth would be linear

However SegWit is nowhere as widespread as it should be, Lightning Network will take time to be widely accepted and the amount of transactions will likely grow much faster than what my initial guess was.

Point being, 1) our current situation would be much better if SegWit transactions were more common and 2) SegWit alone is no long term solution.

Will there be soon another malleability fix soon without segwit?

On BTC? I don't think so, as SegWit itself is deemed to be the malleability fix.

On BCH? I think they are working on one, but am not sure about their progress. Either way I doubt that BCH will adapt LN anytime soon, as LN was one of the main criticisms of the BCH community regarding BTC's scaling approach.

I hear that lightning network coming out this year 2018, why is that when I don't see the point of it when segwit isn't even widely adopted first yet.

I guess LN will serve as an additional incentive to adopt SegWit, as it will have a larger impact on transaction fees, meaning that once LN becomes production ready you'll likely see an uptick in SegWit transactions as well. Also LN will likely take some time until it sees widespread adoption, so the sooner deployment starts the better!

[very_452001]

Ok so there's no need for lightning network now until for another 2-3 years?

...is what I would say if SegWit were widely used, Lightning Network could be activated by the flick of a switch and transaction growth would be linear

However SegWit is nowhere as widespread as it should be, Lightning Network will take time to be widely accepted and the amount of transactions will likely grow much faster than what my initial guess was.

Point being, 1) our current situation would be much better if SegWit transactions were more common and 2) SegWit alone is no long term solution.

Will there be soon another malleability fix soon without segwit?

On BTC? I don't think so, as SegWit itself is deemed to be the malleability fix.

On BCH? I think they are working on one, but am not sure about their progress. Either way I doubt that BCH will adapt LN anytime soon, as LN was one of the main criticisms of the BCH community regarding BTC's scaling approach.

I hear that lightning network coming out this year 2018, why is that when I don't see the point of it when segwit isn't even widely adopted first yet.

I guess LN will serve as an additional incentive to adopt SegWit, as it will have a larger impact on transaction fees, meaning that once LN becomes production ready you'll likely see an uptick in SegWit transactions as well. Also LN will likely take some time until it sees widespread adoption, so the sooner deployment starts the better!

How long you reckon segwit adoption will go to like 90+%?

[HeRetiK]

How long you reckon segwit adoption will go to like 90+%?

No idea, to be honest. It seems to have plateaued at ~11% with little signs of adoption growth for weeks. Some major service providers such as Coinbase have yet to deploy SegWit, once they do we should see some further increase in SegWit transactions. Hard to say when they will be ready though, some time during 2018 I suppose. Whether this will suffice to push SegWit adoption to 90+% is yet another question though.

[very_452001]

How long you reckon segwit adoption will go to like 90+%?

No idea, to be honest. It seems to have plateaued at ~11% with little signs of adoption growth for weeks. Some major service providers such as Coinbase have yet to deploy SegWit, once they do we should see some further increase in SegWit transactions. Hard to say when they will be ready though, some time during 2018 I suppose. Whether this will suffice to push SegWit adoption to 90+% is yet another question though.

Why is coinbase delaying segwit adoption?

[exstasie]

Why is coinbase delaying segwit adoption?

It might be for political reasons..... or simple sour grapes. They've long been lobbying for a hard fork block size increase. In the New York Agreement last year, they agreed to support Segwit, but that was also contingent on a hard fork increase that never came to fruition.

I also don't know what upgrading to Segwit entails for a company of Coinbase's size and architecture. It might be fairly easy and quick to implement Segwit, but migrating all of their wallets/outputs to Segwit might be a larger endeavor. It should be pointed out that most major exchanges took months to support Segwit, and many still don't. Almost none of the exchanges support withdrawal to bech32 addresses yet, and I don't think many are using them for deposit either.