A sketch of the problem
Imagine you send cheques with money and signatures into a box to someone else. That box has a limited space and you can have up to 10 cheques per box. It makes sense because the box has a certain capacity. This also counts for Bitcoin. Everyday transactions are made and those transactions and up in a digital block. However that block also has a limited space. 1MB to be exact. That means that there can only fit a certain amount of transactions in a block. Not to forget that it requires 10 minutes to validate a block. This has brought up a debate about how we can be able to validate more transactions in a shorter period of time. For this problem twoo groups of people had an idea.
Group 1
The 1st group came up with a relatively simple idea about increasing the blocksize from 1MB to 2MB. By increasing the blocksize there would fit more transactions in a block and more transactions would be validated in 10minutes. However this would mean that the blockchain will eventually be very heavy because of the accumulated data through the years.
Group 2
The 2e group came up with a different solution that was about taking away information of a transaction that wouldn’t necessarily have to be in the block! Let me explain this a little bit easier.
Every block has a header. This header contains an amount of information about the block. This header itself takes away valuable space. Also a transaction contains alot of information such as the signature, the script and the public key. This is alot of data that takes away alot of space that can be filled up with transactions.
So they came up with segwit! Segwit would allow a sort of side chain that would transfer the signature, script/code and public key through a different channel. This way there would be more space in the original block and would make place for more transactions.
End result
The segwit update on the Bitcoin blockchain would have been a simple softfork but instead became a fight over group 1 and 2 whether it would become the segwit update or the increased blocksize. In the end the leaders of segwit2x decided to suspend the segwit2x concept as a result of the ongoing fights and a lack of broader consensus among participants.
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Best regards,
Sem
