The Witness of Discount Refers to the reduction in data “Weight” given to the witness part of a Bitcoin transaction – the part that contains the signatures used to prove ownership. Implemented as part of the upgrade of Segregated Witness (Segwit) 2017, this discount effectively lowered the fees for Segwit transactions by witnessing to count less when calculating the total size of a transaction.
On simpler terms, the knowledge data receives a discount of 75%, which means they only count as a quarter of its actual size when deciding how much space it takes in a Bitcoin block. This allows for more transactions per Block and reduces the cost of users adopting Segwit-activated wallets.
But why does the witness discount exist in the first place? What is the poenget of giving knowledge data this special treatment? The answer binds back to Bitcoin’s long -standing scalability challenges and the need to increase transaction capacity without undergoing 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 do something today.
Key takeaways
- Witness of Discount: A discount applied to the size of the “witness” (or signature) part of a Bitcoin transaction that reduces fees.
- A part of Segwit: Witness discount is part of Segregated Witness (Segwit) that solved the long -standing problem of balletability and effectively increased Bitcoin’s block size.
- Scalability: It helps to make Bitcoin transactions more efficient, allowing for more transactions per year. Block.
The purpose of the witness discount
The witness discount was introduced as part of Segwit, a major upgrade to the Bitcoin protocol that separated the transaction data into two parts: the core transaction data and knowledge data (mostly digital signatures). In essence, the testimony received a “discount” as to how much it counts against the total block size.
Before Segwit, Bitcoin’s block size was limited to 1 MB. Segwit brought an indirect increase in the block size by applying a lower “weight” to the knowledge data-thus enables more transactions per year. Block without exceeding the 1MB limit for non-segwit node.
The witness discount meets a crucial target: It allows more transactions to fit into a block while maintaining compatibility with older nodes that have not upgraded to Segwit.
How it works
When a Bitcoin transaction occurs, the core elements are recorded in this transaction -such as the amount of Bitcoin sent and the addresses involved -. However, there is another component called the “witness” that stores the signatures proving ownership of the transferred bitcoin.
- Pre-Segwit: Before Segwit, all parts of a transaction were treated equally with regard to how much space they consumed in a block.
- Post-Segwit: After Segwit, the knowledge data (signatures) was saved separately from the rest of the transaction data. This separation allows multiple transactions to fit into a block as the knowledge data is assigned a lower weight, which effectively gives them a 75% discount. A full transaction under Segwit, which could previously take up, says 300 bytes, now only contributes a smaller amount of this size to the overall weight of the block.
This reduces fees for users who choose Segwit-activated wallets as fees are calculated based on the virtual size of the transaction, which now discounts the knowledge data.
History and reasoning
The story behind the knowledge discount goes back to the wars of the block size in 2015-2017. At that time, the Bitcoin community became involved in heated debates on how to scale the network. Larger block sizes would allow for more transactions per day. Block, but to increase the block size directly (via a hard fork) was controversial. It risked centralizing the network as larger blocks are more difficult to spread and store to nodes with smaller bandwidth and storage.
SegwitSuggested by Pieter Wuille, was introduced as a compromise. It treated the scaling problem by creating more “efficient” block space without requiring a hard fork. This is where the witness discount became important. By discounting the knowledge data, Segwit effectively expanded the number of transactions that could fit into a block while maintaining backward compatibility.
On simpler terms, Segwit Bitcoin allowed to have its cake and eat it too: More transactions per day. Block without the risk of destabilizing the network.
Advantages and disadvantages
Benefits:
- Increased blocking efficiency: The witness discount allows for more transactions per Block, which indirectly increases Bitcoin’s block size while holding it backward compatible with non-upgraded nodes.
- Lower fees for Segwit -users: Since knowledge data gets less weight, Segwit transactions tend to be smaller in size, which means lower transaction fees for users.
- Improved security: Segwit solved the transaction’s moldability problem, which made Bitcoin transactions more secure, which is especially important for second layer solutions such as Lightning Network.
- Improved scalability: By reducing the data burden on each transaction, the testimony improves scalability of the Bitcoin network.
Disadvantages:
- Complexity: Segwit implementation, including the witness discount, adds layers of complexity to the protocol, which some purists in society consider unnecessary.
- Not fully adopted: While the knowledge discount encouraged the use of Segwit, many wallets and exchanges have been slow to adopt it, which means its benefits are not universally experienced.
Witnessed discount vs. Block size increase
One of the biggest debates in the Bitcoin scaling saga was whether to increase the block size directly or to implement a solution like Segwit, which indirectly increased the block size. So how is the Vidnabatten compared to just raising the block size?
Block size increase:
- Direct increase in the number of transactions that a block can have.
- Increases the burden of nodes and requires more storage and bandwidth to follow the network.
- Requires a hard fork that can divide the network (as seen in the case of Bitcoin Cash).
Witness Discount (Segwit):
- Achieve a similar result (increased transaction capacity) without a hard fork.
- Reduces transaction costs for users who benefit from Segwit.
- Does not impose additional burdens on nodes, making it more sustainable long -term.
In essence, the Vestrabate achieves the target of multiple transactions per year. Block without compromising Bitcoin’s decentralization, a key pen in the network’s design philosophy.
Frequently asked questions (frequently asked questions)
Why is witness discount 75%?
The 75% witness discount is found because knowledge data-which includes digital signatures-contributes to the long-term size of the UTXO set that nodes must store permanently. Since this data is only needed for transaction validation and can be discarded afterwards, they have a lower influence on node resources compared to non-witness data.
With the Segwit upgrade, transaction size is measured in weight units (WU) rather than bytes. Data that is not witnessed is awarded a weight of 4 Wu per day. Byte, while knowledge data is awarded 1 wu per Byte-a ratio of 1: 4. This means that knowledge data is effectively counted as 25% of its original size, resulting in a 75% discount.
The choice of 1: 4 weighting was a conscious balance between incentive Segwit -adoption, conservation of network efficiency and maintenance of security. It allows for more transactions per year. Block, while ensuring compatibility with rules before Segwit, which improves Bitcoin’s scalability without sacrificing decentralization.
Does the Vidnabatten mean that Segwit blocks are bigger?
Yes, in practice, Segwit blocks can be larger than the pre-Segwit 1 MB block limit. However, the way the block weight is calculated means that Segwit blocks are more effective in storing data, so that more transactions – which do not count as much weight as before – can fit into a block.
What happens if I don’t use Segwit?
Non-segwit transactions do not benefit from the witness discount, which means they take up more space in a block and typically incur higher fees. However, they are still fully valid and can be treated by the network.
Is witness discount here to stay?
From now on, there are no plans to remove the witness discount. It is still a critical part of Bitcoin’s scalability strategy and is considered a success in improving the network’s efficiency without compromising decentralization or security.