Post SegWit Review : Was it really worth fighting for?

About 4 months ago I wrote a post “What to expect post-SegWit Activation” where I predicted that SegWit would boost the performance of Bitcoin. In Crypto-land 4 months is a very long time so I thought it was about time I had a look back and review whether I got this call right.

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I suggested 2 Bitcoin metrics that were worth keeping an eye on, they were the Mempool size and the Transaction costs. My thinking was that if SegWit was activated and more transactions could be fit into a 1MB block then both of these things should come down.

This is what the Mempool Size looks like since July :-

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As you can see, despite things looking OK during September, it has continued to worsen and now is hovering around record highs.

Here is the Transaction Costs over the same period :-

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Not particularly surprising since the Mempool has continued to blow out....so have the Transaction Costs.

So has the activation of SegWit on the main Bitcoin chain been a complete failure? Well one might argue that Bitcoin adoption has exploded over the same period so we could perhaps blame Bitcoin adoption rates and increased transactions for this continued decline of Bitcoin performance. But before we do, let’s just have a quick look at how many transactions are actually using the SegWit functionality….

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Ok, so what’s going on here? We can see that after activation the number of SegWit transactions has gradually increased….up to a maximum of maybe 18% some time in October and then it has crashed, fluctuating either side of 10%. So is this a massive vote of no-confidence in SegWit? Does it mean that the SegWit Activation has been a complete failure and a waste of time?

If you recall earlier this year there was a lot of very passionate argument about SegWit and there was a faction of users who were prepared to go to the extreme measure of pushing a User Activated Soft Fork which was threatening to fork the main chain. In addition this fork threat was going to cause a wipe-out risk for those who didn’t toe the line of these extremists which meant their transactions could be lost in a blockchain re-org should things go against them.

It was such a huge issue at the time and debate was fierce. Now here we are 4 months after activation and nobody really gives a damn about it?

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You couldn’t make this stuff up. Are the people holding back on SegWit adoption to try and maximise transaction costs, thus revenue? Why signal for an update to the software if you don’t intend to use it? At the time of activation there was nearly 100% signalling support for SegWit!

So now we have a situation where SegWit is not being used, the Mempool and Transaction Costs are blowing out and making Bitcoin practically unusable as a currency. Merchants are dropping Bitcoin support because it is unviable for them….is it any wonder that people are moving into alt-coins like Bitcoin Cash, DASH, Litecoin and Ethereum. ALL of them are currently much better cryptoCURRENCIES than SegWit Bitcoin is right now.

How long until the market realises just how much of a joke BTC has become?

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