Following a previous announcement by F2Pool that they are now to signal for segregated witnesses (segwit), ViaBTC has publicly reiterated they do not support segwit for a number of reasons. The bitcoin mining pool says:
SegWit, which is a soft fork solution for malleability, cannot solve the capacity problem… Even if SegWit after activation can slightly scale up block size with new transaction formats, it’s still far behind the demand for the development of Bitcoin network.
Bitcoin has been running at full capacity for months with numerous proposals put forward and rejected by miners. The latest ones are segwit, currently at around 32% hashrate share, and Bitcoin Unlimited which stands just under 40%.
Segwit’s main aim is to send transactions off-chain and onto second layers, such as the Lightning Network or sidechains. ViaBTC says such transactions “are NOT equal to Bitcoin’s peer-to-peer on-chain transactions” before adding that “LN will also lead to big payment “centers”, and this is against Bitcoin’s initial design as a peer-to-peer payment system.”
The main criticism against segwit is its use of a 1:4 ratio, which many suspect is a political decision that will bind bitcoin’s trajectory for decades to come regardless of technical factors. ViaBTC says:
“SegWit lifts the block size limit to 4MB with 1MB base and 3MB witness block. However, from the current transaction data, the average effective block size will be less than 2MB even if all transactions upgrade to SegWit. This is a tremendous waste. If we want to double the capacity of Bitcoin, we’ll need to make sure the internet bandwidth to run full nodes can support at least 8MB blocks, instead of 2MB. This will make it even tougher to increase block size in the future.”
Moreover, the decision to upgrade to segwit is irreversible, according to ViaBTC. So if something goes wrong, bitcoin might be stuck because:
“On technical terms, SegWit uses a transaction format that can be spent by those who don’t upgrade their nodes, with segregation of transaction data and signature data. This means SegWit is irrevocable once it’s activated, or all unspent transactions in SegWit formats will face the risk of being stolen.”
Some 70% of miners have now made a decision on whether to support segwit or Bitcoin Unlimited, a proposal which simply increases the blocksize as set by nodes and miners. It’s not clear what the other 30% are waiting for, but it will be interesting to see what they do decide once they get around to exercising their duty.
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