What Real Block Size Can Be Expected After SegWit?


The introduction of Segregated Witness (SegWit) was a significant development in the world of blockchain technology. It was a soft fork implemented on the Bitcoin network in August 2017, aimed at resolving some long-standing issues, including the block size limit. Prior to SegWit, Bitcoin’s block size was limited to 1 MB, which resulted in congestion and higher transaction fees during periods of high network activity. SegWit aimed to address this problem by optimizing transaction data and increasing the effective block size. In this article, we will explore the real block size that can be expected after the implementation of SegWit and its implications for the Bitcoin network.


SegWit fundamentally changed how transaction data is stored in blocks. Before SegWit, all transaction data, including the signature information, was stored in the block. With SegWit, the signature information was moved to a separate data structure, known as the witness block, which is not counted towards the 1 MB block size limit. This optimization effectively increased the capacity of each block, allowing more transactions to be processed in a single block.


The theoretical maximum block size after SegWit implementation is around 4 MB. However, achieving this theoretical limit is rare in practice. The reason is that not all transactions benefit equally from the SegWit optimization. Only transactions that utilize the SegWit format see a reduction in size, while non-SegWit transactions remain unchanged. Therefore, the actual block size is influenced by the percentage of SegWit transactions in each block.


Since its activation, the adoption of SegWit has been steadily increasing. Many wallets and exchanges have upgraded their systems to support SegWit transactions, and users have been encouraged to switch to SegWit addresses for their Bitcoin transactions. As the adoption continues to grow, the proportion of SegWit transactions in each block is expected to increase.


The practical real-world block size after SegWit implementation can vary significantly depending on the proportion of SegWit transactions. In some blocks, where the majority of transactions are in SegWit format, the block size might approach or even exceed the 4 MB theoretical limit. However, in blocks with a lower percentage of SegWit transactions, the effective block size will be smaller, closer to the original 1 MB limit.


The increased block capacity due to SegWit has several advantages for the Bitcoin network. First and foremost, it alleviates congestion during times of high transaction activity, reducing the competition for block space and lowering transaction fees. Lower fees make using Bitcoin more affordable for everyday transactions, making it more practical for small payments and microtransactions.


Moreover, larger block sizes also enhance the overall scalability of the Bitcoin network. With the potential for more transactions to be included in each block, the network can handle higher transaction throughput, accommodating a larger user base and fostering further growth and adoption.


However, it is essential to note that larger block sizes also come with potential downsides. As the block size increases, so does the storage and bandwidth requirements for running a full node. This could lead to centralization concerns, as fewer entities can afford the necessary resources to participate fully in the network. Thus, a balance must be struck between increasing block capacity and maintaining decentralization.


In conclusion, the introduction of SegWit was a significant step forward for the Bitcoin network, addressing the block size limitation and improving transaction efficiency. The real block size expected after SegWit implementation can vary based on the percentage of SegWit transactions in each block. As adoption continues to grow, the practical block size is expected to increase, providing benefits such as reduced congestion, lower transaction fees, and improved scalability. However, it is crucial for the Bitcoin community to carefully consider the trade-offs between larger block sizes and the preservation of network decentralization. With a balanced approach, the Bitcoin network can continue to thrive and meet the demands of its expanding user base.