He Witness discount It refers to the reduction of “weight” data given to the witness part of a Bitcoin transaction, the part that contains the firms used to demonstrate the property. Implemented as part of the update of segregated witnesses (SEGWIT) 2017, this discount effectively reduced the rates for Segwit transactions causing the witnesses to count less when calculating the total size of a transaction.
In simpler terms, witness data obtains a 75%discount, which means that it only has a quarter of its real size when determining how much space occupies in a Bitcoin block. This allows more block transactions and reduces costs for users who adopt wallets enabled for Segwit.
But why does the witness discount exist first? What is the point of giving witnesses to this special treatment? The answer is linked to the long -standing scalability challenges of Bitcoin and the need to increase the transaction capacity without checking the network with a risky hard fork. In this article, we explore the purpose behind the witness discount, how it works and why it continues to import today.
Key control
- Witness discount: A discount applied to the size of the “witness” part (or signature) of a Bitcoin transaction, reducing rates.
- Part of Segwit: The witness discount is part of the segregated witness (Segwit), which solved the problem of long -standing transactions and effectively increased the size of the bitcoin block.
- Scalability: It helps that Bitcoin transactions be more efficient, allowing more block transactions.
Witness discount purpose
The witness discount was introduced as part of Segwit, an important update of the bitcoin protocol that separated the transaction data into two parts: the data of central transactions and the data of the witnesses (mainly digital signatures). In essence, the witnesses received a “discount” in terms of how much counts for the general size of the block.
Before Segwit, the Bitcoin block size was limited to 1 MB. Segwit brought an increased indirect block size by applying a lower “weight” to witness data, allowing more block transactions without exceeding the 1 MB limit for nodes that are not secwit.
The witness discount achieves a crucial objective: it allows more transactions to conform to a block while maintaining compatibility with older nodes that have not been updated to Segwit.
How it works
When a Bitcoin transaction occurs, the central elements of that transaction are recorded, such as the amount of bitcoin and the directions involved. However, there is another component called “Witness”, which stores the firms that demonstrate the property of the transferred bitcoin.
- Prefollo: Before Segwit, all parts of a transaction were treated equally in terms of how much space consumed in a block.
- After monitoring: After Segwit, the witnesses (signatures) data were stored separately from the rest of the transaction data. This separation allows more transactions to conform to a block, since the witness data is assigned a lower weight, which gives it a 75%discount. A complete underwit transaction, which could previously assume, say, 300 bytes, now only contributes a smaller amount of that size to the total weight of the block.
This reduces rates for users who opt for wallets enabled for secwit since the rates are calculated according to the virtual size of the transaction, which now discounts the witness data.
History and justification
The story behind the witness discount goes back to block size wars in 2015-2017. At that time, the Bitcoin community was wrapped in heated debates on how to climb the network. Larger block sizes would allow more block transactions, but increase the size of the block directly (through a hard fork) was controversial. He risked to centralize the network, since the largest blocks are more difficult to spread and store nodes with less bandwidth and storage.
SegwitProposed by Pieter Wuille, it was introduced as a commitment. He approached the scale problem creating a more “effective” block space without requiring a hard fork. This is where the witness discount became important. When discarding the witnesses, Segwit effectively expanded the number of transactions that could fit in a block while maintaining the backward compatibility.
In simpler terms, Segwit allowed Bitcoin to have his cake and also eat it: more block transactions without the risk of destabilizing the network.
Pros and cons
Pros:
- Greater blocking efficiency: The witness discount allows more block transactions, indirectly increasing the size of the bitcoin block while maintaining it with not updated nodes.
- Lower rates for Segwit users: Since witnesses have less weight, secwit transactions tend to be smaller, which means lower transaction rates for users.
- Improved security: Segwit solved the malleability problem of the transaction, causing Bitcoin transactions to be safer, which is especially important for second -layer solutions such as the Lightning Network.
- Improved scalability: By reducing data loading in each transaction, the witness discount improves the scalability of the Bitcoin network.
Cons:
- Complexity: Segwit’s implementation, including witness discount, adds layers of complexity to the protocol, which some purists in the community consider unnecessary.
- Not completely adopted: While the witness discount encouraged the use of Segwit, many wallets and exchanges have taken to adopt it, which means that its benefits have no experience universally.
Witness discount versus Block size increase
One of the main debates in the Bitcoins scale saga was whether to increase the size of the block directly or implement a solution like secwit, which indirectly increased the size of the block. So how does the witness discount compare with simply increasing block size?
Block size increase:
- Direct increase in the number of transactions that a block may contain.
- Increases the loading of the nodes, which requires more storage and bandwidth to keep up with the network.
- It requires a hard fork, which can divide the network (as seen in the case of Bitcoin Cash).
Witness discount (SEGWIT):
- It achieves a similar result (greater transaction capacity) without a hard fork.
- Reduce transaction costs for users who take advantage of Segwit.
- They do not impose additional charges on nodes, which makes it more sustainable in the long term.
Essentially, the witness discount achieves the objective of more block transactions without compromising the decentralization of Bitcoin, a key principle of network design philosophy.
Frequent questions (frequent questions)
Why is the witness discount 75%?
The 75% discount of witnesses exists because the data of the witnesses, which include digital signatures, do not contribute to the long -term size of the UTXO set that the nodes must permanently store. Since these data are only needed for transactions validation and can be discarded later, it has a lower impact on node resources compared to non -testimony data.
With the Segwit update, the transaction size is measured in units of weight (WU) instead of bytes. The non -witness data is assigned a weight of 4 Wu per byte, while the witnesses are assigned 1 Wu by byte, a 1: 4. 4. 4. This means that the witnesses data are effectively counted as 25% of its original size, resulting in a 75%discount.
The choice of weighting 1: 4 was a deliberate balance between encouraging Segwit’s adoption, preserving network efficiency and maintaining security. It allows more block transactions, while guaranteeing compatibility with the rules prior to the secwit, improving Bitcoin’s scalability without sacrificing decentralization.
Does the witness discount mean that Segwit’s blocks are larger?
Yes, in practice, secwit blocks can be larger than the 1 MB block limit prior to the secwit. However, the way in which the block weight is calculated means that secwit blocks are more efficient to store data, so more transactions, which do not count as much weight as before, can fit in a block.
What happens if I don’t use Segwit?
Non -secwit transactions do not benefit from the witness discount, which means that they occupy more space in a block and generally incur higher rates. However, they are still completely valid and can be processed by the network.
Is the witness discount here to stay?
From now on, there are no plans to eliminate the witness discount. It remains a critical part of Bitcoin’s scalability strategy and a success is considered widely in improving network efficiency without compromising decentralization or security.
