“It’s contingent upon SegWit.”
Lightning Labs developer Joseph Poon is talking about bitcoin’s Lightning Network, or the top-layer network that could potentially boost transaction capacity to millions of transactions per second.
But, the same can be said of most of the other technical improvements for bitcoin presented at Construct 2017, CoinDesk’s inaugural San Francisco developer conference. In many presentations, it seemed as if moving forward with the project, a more than $15bn economic network that sprang from only open-source code, is wholly dependent on SegWit activating.
The problem, of course, is that it might not activate due to reasons that now seem, to many, entirely political.
Politecnico di Milano Bitcoin and Blockchain Technology professor Ferdinando M Ametrano told CoinDesk:
“From the technical point of view, SegWit is crucial for bitcoin’s evolution.”
Murmurings from other attendees seemed to bolster this view, but any action still seems far. As of Tuesday, one new mining pool is flagging support for the change.
If it continues to do so, this will bring support for the upgrade up to 30% or 31%. Still, it’s short of the required threshold of 95% necessary for activation.
One of the best-known benefits is Lightning Network. SegWit moves around transaction data in such a way that it solves a problem known as “transaction malleability,” which makes transactions using the top-layer network more secure and user-friendly.
“You can kind of make it work without SegWit. The problem is that it sucks,” Poon explained in his presentation.
Elsewhere, others made a similar argument.
The most obvious presentation to dive into examples was Bitcoin Core developer Eric Lombrozo’s presentation on SegWit, where he called it “the most exciting thing” he’s worked on so far as a bitcoin developer.
He mentioned that it can help enable more advanced scripting, meaning that bitcoin users can lock up their funds in other new ways, and that it would enable different signature schemes, such as Schnorr signatures or even signatures that are resistant to quantum computers.
And, other attendees were quick to point out other pieces.
“I think that more technical issues might be lost, like that signature validation will become linear rather than quadratic,” Ametrano said.
In conversation, Lightning Labs developer Olaoluwa Osuntokun further noted how it makes transactions safer for users of hardware wallets.
Although most, if not all, of bitcoin’s most active developers support the change, but some still believe it’s proven contentious.
Drew Rasmussen, CTO of OTCXN, a startup looking to apply blockchain to the forex market, talked about it more from the frame of reference of a bitcoin outsider who’s been more focused in the enterprise blockchain work.
“I think it would be something good to implement,” he said, though he acknowledged that the community’s skepticism of changes could be what’s holding it back.
So, what happens if it doesn’t activate?
Despite the seeming urgency around the change, Bitcoin Core contributor Cory Fields, who also works at MIT’s Digital Currency Initiative, said he doesn’t yet believe he’s heard a compelling argument for why it shouldn’t be activated.
“SegWit is such a clear and obvious win. I’ve yet to hear a downside argument to it,” he told attendees.
He framed the issue as one of politics, not technology.
There’s no way to tell the future, but it’s notable that when asked the same question, attendees seemed to take an optimistic view of the situation.
Osuntokun mentioned that Lightning has a backup plan if SegWit doesn’t activate. But, in the mean time, since SegWit offers a better network, they’re operating under the assumption that it will trigger.
“If it’s the best design, it makes sense to go toward that,” he said.
Ametrano echoed the growing opinion that bitcoin is slow to change, and that that’s actually a good thing.
“I think it’s a win-win situation for bitcoin, because if SegWit is accepted, and I think it should be because it’s moving bitcoin’s technical boundary forward, this will improve bitcoin a lot. But if it is not approved, this will demonstrate that bitcoin cannot be manipulated or managed, not even by Bitcoin Core,” he said.
Osuntokun was similarly optimistic, guessing that SegWit would activate in March.
When asked why, he shrugged and said only:
“March feels right.”
Images via Cryptograffiti and Pete Rizzo