Among other blockchain upgrades, Segregated Witness [SegWit] has been one of the most popular protocols whose narrative revolved around altering the block size limit by removing signature data from the transaction.This allowed addresses to both decrease the size and cost of individual transactions while increasing the maximum block size to more than 1 MB. The Litecoin Network successfully activated the long-debated Mainnet protocol in May 2017.
More than three years later, Litecoin’s SegWit usage has reached 80%, according to the latest data from Blockchair.
Despite hitting a few lows, Litecoin’s SegWit usage has been steadily increasing over the last three years. This has further resulted in a substantial decline in the network’s transaction fees. Notably, the figures for the transaction fee witnessed a major fall in April this year and has been consistent ever since.
A quick primer: For SegWit activation, Litecoin needed 75% approval while Bitcoin required 95% support from network miners. The latter could not acquire the initial support. Litecoin, on the other hand, owing to the lower threshold, could activate the technology. This opened an opportunity for the naysayers in the Bitcoin community to understand how activation may work on the network.
After initial hesitation, a few months later, SegWit was implemented in Bitcoin too. But the rate of adoption rate and use have been slower than Litecoin. At the time of writing Bitcoin’s SegWit usage stood at 54%.
Commenting on the usage rate of the protocol on both Litecoin and Bitcoin, Charlie Lee, Managing Director of Litecoin Foundation tweeted,
“Litecoin SegWit usage has reached 80%, whereas Bitcoin is only at 50%. This is mainly because Blockchain.com still has not implemented SegWit.”
Luxembourg-based cryptocurrency exchange Bitstamp had earlier noted the potential for SegWit adoption to grow on the Bitcoin network, which has this year been showing growing signs of congestion, in its recent report.
It was in 2019 when Bitcoin’s SegWit usage gained traction. More blocks over 1MB have been mined during the same year than all of 2018.
After nearly seven months of low transaction fees on the Bitcoin network, starting from October 2019 to April, the figures appeared to have sprung up once again which coincided with its price movements. However, this wasn’t the case with Litecoin. Despite the recent surge in its value, the transaction fees continued to be low.
SegWit’s low adoption by Bitcoin network participants isn’t entirely because of the protocol being optional in nature. One of the few reasons for the reluctance in the implementation was also because of the miners using AsicBoost firmware. While this was incompatible with SegWit, the firmware allegedly helped the Bitcoin miners to verify transactions up to 20% faster.