On August 24, 2017, an update of the Bitcoin protocol called SegWit (Segregated Witness) had its first transaction in block number 481824. Coinfirm’s AML & Analytics Platform supports SegWit transactions, so for the 3rd year anniversary we decided to take a deeper look at that first SegWit transaction and where it went.
Pieter Wuille finished his work on SegWit in 2015 and two years later his work gave the potential possibility of modifying the signed transaction to the Bitcoin protocol. This is mainly why the effective block size is increased without having to increase the bitcoin block size limit thanks to downloading the signature data from Bitcoin transactions (digital signatures can take up to 65% of the block). In practice, this allows more transactions to be stored in one block, thereby increasing the throughput of the entire network. Digital cryptographic signatures, which take up the most space, are kicked off the block and their size does not count towards SegWit compatible block size, with the added benefit that it supports the creation of second layer protocols such as lightning web.
When we take a look at the first SegWit transaction, in the transaction hash:
you will find an encoded sentence in Hexadecimal format. After decryption of the message:
- 42697462616e6b20496e632e204a6170616e20737570706f72747320536567 57697421
it states “Bitbank Inc. Japan supports SegWit!”