Capitalizations Index – B ∞/21M
So, yes, I understand if bitcoin moves, LTC moves generally in the same direction at the same time. BUT Mt Gox FUD article I read says it's all bitcoin can bitcoin cash that they still have to sell pending courts approval. Why is LTC getting punished for excess sales in BTC? Or are they selling LTC, too, but just not including it in the article? I would say buy each and every dip and eventually they will all be sold if you can afford to.
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Segregated Witness, or Segwit, has finally been activated by a super majority of the current hashpower on the bitcoin network. Segwit fixes many bugs currently in the protocol, and allows for some scaling using an effective blocksize increase.
In December of 2015, the source code for (Segwit) was released. It was meant as a fix for the ever-problematic transaction malleability bug, which allowed for someone to change one or two characters of a transaction’s ID before it was cemented into the blockchain. Along with that, it provided a method of scaling bitcoin. Doing away with the concept of a blocksize, a new metric was made called blockweight.
For years the software was not added to the bitcoin protocol as it never garnered the necessary 95% of the hashpower needed to activate. It was to be implemented though means of a softfork, which meant it would comply with all currently consensus rules and be backwards compatible with those running old software and did not wish to upgrade.
Whether you believe that Segwit was a direct result of the grassroot approach of BIP148 forced miners to finally activate it after all this time, or the New York Agreement was the reason everyone came together to signal for Segwit, it is finally here.
A second BIP was released weeks ago to lower the activation threshold to 80% of the hashpower, but even with the lowered bar Segwit still achieved around 97% signaling and locked in during the beginning of August.
After the official lock-in period, the network allowed for two weeks to provide grade period of sorts for people to upgrade their software to work with Segwit.
There has been a ton of misinformation about Segwit, so this article will hopefully clear some things up of how it actually works. As stated earlier the whole idea of a blocksize has been gotten rid of. Instead, the network will now use blockweight.
There’s two types of data that are contained in a transaction. Firstly, there is actual transaction data, such as the address the coins are being sent to. Then there is the witness data, which is all the information that is only needed when the transaction is confirmed, and then that data is essentially never used again.
Segwit provides a “discount” to the witness data, and once committed to the blockchain it gets pruned. These 1000 1KB transactions would obviously fill the current blocksize of 1MB, but remember blocksize isn’t even a metric any more. It’s been replaced by blockweight, the new limit of which will be set at 4,000,000 “units.”
The way the new unit system works is the number of units in a transaction is simply the number of bytes of transaction data multiplied by four. Witness data is, as said before, discounted. The bytes of the witness data are essentially a direct translation to units at a 1:1 rate.
So, for example, let’s say there’s 1000 transactions in the mempool, all at 1KB of data. Now let’s say in each of the transactions, 400 bytes is witness data and the other 600 bytes is transaction data. The 600 bytes for transaction data is now worth 2,400 units, while the witness data is now worth 400 units giving the whole transaction a weight of 2,800 units. All of these transactions together will only take up 2,800,000 of the 4,000,000 units, leaving room for more transactions.
Once the transaction is confirmed by the network, the not needed witness data will be pruned off the blockchain, to save storage space and decrease bandwidth use.
For those of you expecting an immediate sign that Segwit is helping everything, I’m sorry to let you down. In reality, it could be weeks or even months before Segwit really starts to have widespread adoption.
Segwit transactions can only be sent from Segwit addresses. So, every single address that currently contains coins would have to send them to a Segwit address before we see the full effect of the upgrade. And even then, there could be a decent chunk of users who still don’t trust Segwit and don’t want to use it. Which is perfectly fine, that’s the point of a softfork. It doesn’t force users who don’t agree to it to upgrade to it.
For you to use segwit and send segwit transactions, you’ll need to send your coins to wallet that generates Segwit addresses. Otherwise, it will just be a normal transaction.
Moving forward, Segwit was an important setup to the upgrading and scaling of the bitcoin network, which has been woefully overloaded in the past several months. Segwit opens the door to better implementation of the , which can allow for transactions to be sent off chain for pennies.
Coming in November, the second half of the New York Agreement is set to take place calling for a doubling of the blockweight to even further scale the network though means of a hardfork.
Will you be using segwit from here on in? How do you think this will effect the network? Let us know in the comments below!
Images courtesy of Shutterstock, Segwit.co
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Chinese bitcoin exchanges are gearing up to resume cryptocurrency withdrawals following the implementation of a video verification procedure.
Following the in which Chinese exchanges detailed the information required from clients in order to process their withdrawals, users are now receiving emails announcing video identity verification in accordance with the latest KYC/AML procedures imposed by the People’s Bank of China (PoBC).
The reads:
In accordance to KYC / AML regulations and account monitoring procedures Huobi is subject to, we will initiate video verification at 17:00 Mar 28th (GMT +8), please cooperate to complete video verification as requested then, or it may affect your withdrawals.
Namely, two of the so-called “Big Three” exchanges Huobi and OKCoin have started implementing video verification.
Following Huobi, OKC has also started video verification.
— cnLedger (@cnLedger)
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Recently, the PBoC proposed a draft that exchanges in the country considered acceptable except for one: on-site verification prior to opening an account, a practice that is common to traditional banks but not to bitcoin exchanges.
However, the latest move by the exchanges suggests that on-site verifications will not be implemented, at least for the time being. It also means that if the PBoC and exchanges have finally reached an agreement on AML (Anti-Money Laundering) procedures, cryptocurrency withdrawals should resume very soon.
The return of cryptocurrency withdrawals should help exchanges regain some of the customers that have been flocking towards in recent months. However, with the removal of margin trading and , it’s unlikely that the Chinese market will regain its 90%+ share of the global bitcoin trading market.
Exchange operators will require users to provide their personal information along with explanations of the sources of the funds to be withdrawn and their intended withdrawal destinations.
Now, with the addition of video confirmation, China has become one of the most countries for bitcoin exchanges.
While some traders may feel drawn to the clarity these regulations provide, others may choose to stick with p2p alternatives like and who offer greater privacy and which have experienced record trading volumes since the PBoC clampdown.
In the long-run, the regulations imposed on exchanges may make for a healthier, more decentralized bitcoin market and help boost bitcoin’s overall reputation within the country.
Furthermore, the introduction of clear rules and guidelines may make way for alternative cryptocurrencies to be added on these exchanges that have, so far, only dealt with bitcoin and Litecoin.
Do you think "big three" will list new altcoins after withdraws are resumed? (Now they only have btc and ltc)
— cnLedger (@cnLedger)
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Can Chinese exchanges recover from the blow dealt by the PBoC and return to their old selves? Will they add new cryptocurrencies? Let us know what you think in the comment section.
Images courtesy of Shutterstock, Twitter
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