THE Discount for witnesses It refers to the reduction of the “weight” data given to the part of the witnesses of a bitcoin transaction, the part that contains the signatures used to demonstrate the property. Implemented as part of the update of the 2017 SEE TIME (Segwit), this discount has actually reduced the commissions for segwit transactions, realizing the witness data without less when calculating the total size of a transaction.
In simpler terms, the witnesses data get a 75%discount, which means that it counts only a quarter of its actual dimensions when determining how much space occupies in a bitcoin block. This allows multiple blocking transactions and reduces costs for users who adopt wallets authorized for segWit.
But why does the witness discount exist first? What is the point of giving witness data this special processing? The answer is to the long -standing Bitcoin scalability challenges and the need to increase the transaction capacity without reviewing the network with a difficult risky fork. In this article, we explore the purpose behind the witness discount, how it works and because it continues to import today.
Keyway keyway
- Discount for witnesses: A discount applied to the size of the “witness” part (or signature) of a bitcoin transaction, reducing the commissions.
- Part of segwit: The witness discount is part of the segregated witness (segwit), which has solved the problem of malleability of long -standing transactions and has actually increased the size of the bitcoin block.
- Scalability: Helps to make bitcoin transactions more efficient, allowing more block transactions.
Purpose of the witness discount
The witness discount was introduced as part of Segwit, an important update to the Bitcoin protocol that separated the transactions of transactions in two parts: the core transaction data and the witnesses data (mainly digital signatures). In essence, a “discount” was assigned to the witnesses data in terms of what matters towards the overall dimension of the block.
Before Segwit, the size of the bitcoin block was limited to 1 MB. Segwit brought an increase in the size of the indirect block by applying a “weight” less than the witnesses data, thus allowing more block transactions without exceeding the limit of 1 MB for non segwit nodes.
The witness discount reaches a crucial goal: it allows multiple transactions to adapt to a block while maintaining compatibility with the oldest nodes that have not updated to segwit.
How it works
When a bitcoin transaction occurs, the key elements of that transaction are recorded – such as the amount of bitcoin and the addresses involved -. However, there is another component called “witness”, which stores the signatures that demonstrate the property of the transferred bitcoin.
- Pre-segwit: Before Segwit, all parts of a transaction were treated equally in terms of how much space they consumed in a block.
- Post-segwit: After Segwit, the data of the witnesses (signatures) were stored separately from the rest of the transactions. This separation allows multiple transactions to adapt to a block, as witnesses data is assigned a lower weight, actually giving it a 75%discount. A complete transaction under Segwit, which could previously occupy, say, 300 bytes, now contributes only to a lesser quantity of that dimension to the total weight of the block.
This reduces the commissions for users who opt for wallets authorized for segWit as the commissions are calculated based on the virtual dimension of the transaction, which now discard the witnesses.
History and logic
The story behind the witness discount dates back to the blocing wars in 2015-2017. At that time, the Bitcoin community was involved in heated debates on how to climb the net. The size of the larger blocks would allow more transactions for blocking, but the increase in the block size directly (through a hard fork) was controversial. He risked centralizing the net, since the larger blocks are more difficult to propagate and archive for knots with less bandwidth and storage width.
Segwitproposed by Pieter Wuille, it was introduced as a compromise. He addressed the problem of downsizing creating more “effective” blocks without requesting a hard fork. This is where the witness discount has become important. By choosing the witnesses data, Segwit has effectively expanded the number of transactions that could adapt to a block while maintaining compatibility backwards.
In simpler terms, Segwit has allowed Bitcoin to have his cake and to eat it also: more transactions for blocking without the risk of destabilizing the net.
Pros and cons
Pros:
- Increase in block efficiency: The witness discount allows greater block transactions, indirectly increasing the size of the bitcoin block by keeping it compatible backwards with unaw down nodes.
- Lower commissions for segwit users: Since the witnesses are given less weight, segwit transactions tend to have smaller dimensions, which means more lower transaction taxes for users.
- Improved security: Segwit solved the problem of transactions malleability, making Bitcoin transactions safer, which is particularly important for second level solutions such as the Lightning network.
- Improved scalability: By reducing the burden of data on each transaction, the witness discount improves the scalability of the Bitcoin network.
Against:
- Complexity: The implementation of Segwit, including the witness discount, adds levels of complexity to the protocol, which some purists in the community consider unnecessary.
- Not completely adopted: While the witness discount has encouraged the use of segwit, many wallets and exchanges have been slow to adopt it, which means that its benefits are not universally experienced.
Witness discount with respect to the increase in the size of the block
One of the main debates in the Bitcoin downsizing saga was whether to directly increase the size of the block or implement a solution as a segwit, which has indirectly increased the size of the block. So how do you compare the witness discount to simply increase the size of the block?
Increase in the block size:
- Direct increase in the number of transactions that a block can contain.
- Increase the burden on the knots, requesting more storage and bandwidth to keep up with the net.
- It requires a hard fork, which can divide the network (as shown in the case of Bitcoin Cash).
Witnesses discount (segwit):
- It gets a similar result (increase in transaction capacity) without hard fork.
- Reduces transaction costs for users who exploit segwit.
- It does not impose additional charges on the nodes, making it more sustainable in the long term.
In essence, the witness discount reaches the objective of multiple blocks for blocking without compromising the decentralization of Bitcoin, a key principle of network design philosophy.
Frequent questions (FAQ)
Why is the witness discount 75%?
The 75% witness discount exists because the witnesses’ data, which include digital-non-non-term sizes to the long-term size of the UTXO set that the nodes must store permanently. Since these data are necessary only for the validation of transactions and can be discarded later, it has a lower impact on the resources of the node than the non -testimony data.
With the segwit update, the size of the transaction is measured in the weight units (WU) instead of in byte. Non -distinct data is awarded a weight of 4 wu per bytes, while the witnesses data is assigned 1 WU per byte: a 1: 4 ratio. This means that the witnesses data is actually counted as 25% of its size original, with consequent 75%discount.
The choice of weighting 1: 4 was a resolved balance between encouraging the adoption of segwit, preserving the efficiency of the network and maintaining safety. It allows multiple block transactions by ensuring compatibility with pre-segwit rules, improving Bitcoin scalability without sacrificing decentralization.
Does the witness discount mean that segwit blocks are bigger?
Yes, in practice, the segWit blocks can be greater than the lock limit of 1 MB pre-segwit. However, the way in which the weight of the block is calculated means that the segwit blocks are more efficient in the data archive, therefore more transactions – which do not count for all the weight before – can adapt to a block.
What happens if I don’t use segwit?
Non sequwit transactions do not benefit from the witness discount, which means that they occupy more space in a block and generally involve higher commissions. However, they are still completely valid and can be processed by the network.
Is the witness discount here to stay?
Starting now, there are no plans to remove the witness discount. It remains a fundamental part of Bitcoin scalability strategy and is widely considered a success in improving the efficiency of the network without compromising decentralization or safety.