According to an analysis by Mark Murch Ehrhardt of Chaincode Labs, 88% of all Bitcoin transaction records pay higher fees than necessary. Erhardt bases his conclusion on data showing that only 12% of input transactions use the SegWit format, which is cheaper than working with the old listings.
Erhard believes that by relying on old transaction fees, Bitcoin blocks remain smaller than they would otherwise be and contributes to the accumulation of seemingly unconfirmed transactions.
The blocked Bitcoin mempool of 107 transaction blocks yesterday at one point served as a reminder that you can save on fees by making cheaper transactions. The easiest way is to certify SegWit for all future transactions, Erhardt said.
Ehrhardt noted that in order to reduce blockchain inflation, it is important to move from legacy SegWit transactions to efficient SegWit transactions:
“The longer the less efficient production formats proliferate, the more future blockchain debt will accumulate.”
Erhardt believes that the integration of SegWit into large wallet services is long overdue and contributes to the emergence of a mempool and unnecessary proliferation of blockchains. “It’s been almost 3.5 years since SegWit was activated,” he said at the end of a post on the Mempool case.
“At what point can wallets that cannot send messages to the original SegWit addresses be considered obsolete?”
Erhard worked as a cryptocurrency wallet developer for many years before joining Chaincode Labs in 2020, specializing in UTXO management of Bitcoin wallets, helping them save money on business transactions and maintenance costs in various ways.
SegWit transactions currently account for approximately 51% of all Bitcoin transactions; A fortune that is likely to grow in size as wallet providers face the growing demand for SegWit game support.
The estimated minimum next block embed fee is currently 149 bits / byte, which equates to a fee of $ 14.97 to $ 44,870 per bitcoin.
How to use SegWit saves transaction fees
While SegWit transactions are technically no less than older transactions, their data components are weighted differently when it comes to including them in a block.
The data about the witness component in the transaction is not necessary for the blockchain to work and is therefore deducted when calculating the total transaction volume. This makes SegWit transactions smaller and therefore requires lower processing fees – they are confirmed faster than older transactions with the same fees.
How to start using SegWit right now
After finding an efficient and reliable wallet that supports SegWit transactions, the most important component of using SegWit is to move funds to be used from old addresses (starting with “1” or “3”) to SegWit addresses (starting with “bc1”).
Electrum is one of the most popular and proven SegWit-enabled bitcoin wallets that also supports multi-signature transactions and private key import / export. A growing number of major exchanges are accepting SegWit support, including Bitstamp, BitMEX and more recently Binance. This means that it can also reduce the cost of transactions to exchanges by sending them from a SegWit address.