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Segwit in Easy to Understand Terms

Now that Segwit has been locked in for Litecoin. it’s about time to take a closer look at what Segwit is and how it improves Litecoin. Here is a very brief introduction of what Segwit – it is please forgive me if it’s a little bit too simplistic but I want to try to summarize it in very easy to understand terms.

What is Segwit?

If you consider of Bitcoin miners as accountants that process all the transactions that happen on the network and bundles them up into a ledger called the blockchain. Then the Segwit is a change to the ledger.  Think of it as a tax form.  It’s the act of removing of a signature from the form and placing it into a separate form. That’s all it is. Segregation of witness – the removal the signature on a form and placing it elsewhere. By taking out the signature, you create additional room on the ledger to fit more transactions.

Why Adopt Segwit?

Segwit is vital for the Bitcoin network where transactions are taking a long time because there isn’t enough room on each ledger (block) to place all the transactions. Litecoin doesn’t have this problem. Instead, Segwit was adopted to allow for technologies such as the Lightning Network.

Segwit is a technological upgrade, and I can see why miners will go crazy over this. Especially when miners are the ones who decide to adopt this or not. Consider like an association of tax accounts trying to approve a new form. Accountants don’t like each other already, and they must all agree on a substantial change to a tax form. It turns out for Litecoin it was possible to persuade the miners to agree with each other, whilst for Bitcoin, it’s not yet possible as there is much more drama.

The Post-Segwit World

Now that Segwit is locked in for Litecoin, there are substantial changes in currency price (generally in the upward direction). Of course, must take this with a slight grain of salt. Litecoin prices are susceptible to financial manipulations such as the good old pump and dump.  Litcoin is getting a lot of media attention. This means there will be a lot of new investors that still don’t understand the consequences of Segwit or how Lightning Networks work. Some will overvalue it while others are indifferent. The most important thing is to understand what Segwit is and learn more about the Lightning Network.

The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action. Although best efforts are made to ensure that all information provided herein is accurate and up to date, omissions, errors, or mistakes may occur. 
Disclosure: Authors are invested in cryptocurrency projects and have cryptocurrency holdings - including those covered on this website. 

Michael
I’m Michael Gu, Creator of Boxmining. I’ve been involved in the digital asset and Blockchain space since 2012. Something I immediately noticed was that accurate information is hard to come by in this space. More often than not, we find extremely biased information that exploits the complexity of blockchain to obscure facts. Having been around before bitcoin or blockchain was even “cool” meant that I had to do a lot of discovery myself, and along the way, I had many successes, but also made mistakes. I started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share my experiences. Being based in Asia, I also found a huge discrepancy between digital asset trends and knowledge gap in the West and China. So I leveraged my knowledge and positioning to bridge that information gap and let people know what is truly happening. This journey has been nothing short of exhilarating for me, starting from when I mined Bitcoin in grad school to appearing on China’s national television as an overseas expert on blockchain technology, and having the honour of interviewing leading crypto entrepreneurs, including Binance CEO Changpeng Zhao and FTX founder Sam Bankman-Fried.

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