The Hard Truth About Segwit

The Hard Truth About Segwit

Segregated Witness or Segwit is a proposed update to the Bitcoin software that intends to speed up the network and address the network scaling issues. However when one looks beyond the hype, the hard truth about Segwit is revealed.

On the surface Segwit looks to be a bengin and productive update to Bitcoin. The update changes how blocks are stored. Essentially new storage space is created in Bitcoin’s blocks, which is not subject to the 1MB size limit but rather a separate 0.7MB limit. The witness data( aka transaction info about inputs and outputs) is moved to this new storage space freeing up room in the original space with a 1MB limit.

The new opposition to Segwit is called Bitcoin Cash (BCH). Bitcoin Cash simply raises the block limit to 8MB. On August 1st Bitcoin Cash hard forked the Bitcoin blockchain. It is now its own digital asset, separate from Bitcoin (BTC).

In this post we have included statements on the details and implications of Segwit by two reputable people in the blockchain space.

Statement by blockchain architect and developer, Nathan Hourt:

Nathan Hourt image

“Segwit has a lot of technical, economic, and political implications around it. I will now elucidate on some of these concerns. I note that the proposals to raise the block size limit have little or no implications other than the fact that processing more transactions requires more storage space and network bandwidth (although I have heard this increase in bandwidth could cause trouble for nodes/miners behind the Great Firewall of China, I have not researched this and do not know if it’s true).

One of the most troubling aspects of segwit is the fact that, from its inception, it has been promoted primarily by use of censorship, deception, bullying, inciting fear and divisions, and other such chicanery that has absolutely no place in an open source project. I emphasize that this is notmere conjecture — the use of censorship on the main Bitcoin discussion channels such as the /r/Bitcoin subreddit and to suppress all discussion of problems or disadvantages of segwit is well documented [12], while these same discussion channels allow overt bullying of any users who question segwit.

Segwit proponents have repeatedly used divide-and-conquer strategies to attempt to play one demographic of Bitcoin users (i.e. users, miners, exchanges, merchants…) against another, attempting to scare both sides into embracing segwit as a security blanket. For example, segwit is frequently pushed by people making wild and unfounded conjectures about retroactive forks and replay attacks stealing users’ money, and advising users to contact merchants to demand segwit support to avoid this possibility. Cooler heads will note that people will usually see any significant chain reorganization coming, and any serious attempt to fork the chain will include replay attack preventions (i.e., Bitcoin Cash).

Even without knowing anything about segwit, I can say with certainty that no good idea is ever promoted using censorship or divide-and-conquer strategies. Good ideas promote themselves, and all effort can simply be spent helping people understand them.”

“Segregated witness is systematically destroying everything good and worthwhile about Bitcoin: segwit is inelegant and complicated; it creates two parallel sets of rules for evaluating transactions, but ignores one of them. Segwit breaks Bitcoin’s security by empowering miners and anyone who can coerce them to steal balances. And segwit is breaking the Bitcoin ecosystem up, causing people to fork the blockchain just to avoid using it, and destroying the mind share, confidence, and name recognition in Bitcoin.”

Read the full post by Nathan (@modprobe) on

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Statement by Rick Falkvinge, Pirate Party Founder

Rick Falkvinge

“Based on Blockstream’s behavior in the Bitcoin community, I have become absolutely certain that Segwit contains patents that Blockstream and/or their owners have planned to use offensively. I base this not on having read the actual patents, for they can be kept secret for quite some time; I base this on observing Blockstream’s behavior, and having seen the exact same behavior many times before in the past 20 years from entities that all went bankrupt.”

Source – Rick Falkvinge


The statements made by Hourt and Falkvinge are enlightening. If their reports on Segwit and Blockstream are true, one would easily see the value in supporting and holding Bitcoin Cash (BCH) over Bitcoin (BTC – with Segwit).

Moreover this presents an opportunity for more market competition and we could see other blockchains and decentralized currency rise and surpass Bitcoin in value ($ market cap).

Other impressive blockchains with digital assets include Steemit, Dash, Ethereum, EOS, and Litecoin just to name a few.

At this time Segwit has begun implementation on the Bitcoin blockchain, however it is not active yet. Go to to follow the status of the segwit activation. 

Which will you support?

Bitcoin or Bitcoin Cash?

Helpful Videos

Preparing For The BIP 148 Bitcoin Fork – How To Protect Your Digital Assets

Preparing For The BIP 148 Bitcoin Fork – How To Protect Your Digital Assets

BIP stands for Bitcoin Improvement Proposal. On August 1st of this year Bitcoin will experience a BIP called a user activated soft fork (UASF).

The fork attempts to do 2 main things. It will implement SegWit and patch a security vulnerability on the Bitcoin Core software known as CVE-2017-9230.

The implementation of SegWit is a big deal and very political in the Bitcoin space. Many are for it and many are against it. Basically SegWit believes the solution is to the Bitcoin scaling challenge is to change how blocks are stored. It will creates smaller blocks more often. More details on SegWit.

Hard Fork vs Soft Fork

Both hard forks and soft forks both describe ways to update the Bitcoin core wallet software.

A hard fork is a permanent divergence in the blockchain, while a soft fork is a temporary divergence . BIP 148 is technically a soft fork.

Trace Mayer & Jeff Berwick Discuss The BIP:


How Should You Prepare?

You should prepare for BIP 148 by creating and storing your own private keys. It is also suggested to perform your own network consensus by running a full-node.

This means you should move or make sure your Bitcoin is in a wallet that A. gives your total control of your keys and B. supports the BIP 148.

Here is a list of wallets that support the upcoming Bitcoin improvement proposal:

  1. 09 Apr 2017 – Electrum
  2. 09 Apr 2017 – Samourai Wallet
  3. 11 Apr 2017 – Coinkite
  4. 12 Apr 2017 – Coinomi
  5. 22 May 2017 – GreenAddress
  6. 24 May 2017 – Ledger Wallet
  7. 27 May 2017 – Mycelium 
  8. 28 May 2017 – Electrum 
  9. 29 May 2017 – Airbitz 
  10. 09 Jun 2017 – Bitgo


What About Exodus?

Exodus is one of our prefered wallets at BitcoinShirtz. They have yet to fully support the BIP but Exodus users retain full control of private keys, so they should be good to go.

Exodus is designed to allow you to control your own wealth. With this control comes the ability to make decisions for yourself and also have 100% control over your funds – this includes Bitcoin and all assets.

Exodus gives the power to you as a user to decide how you want to proceed in the case of a fork. No matter the decision of Exodus, the software is designed to give you the user total ownership and full autonomy over all assets.

Unlike an exchange or hosted wallet, Exodus gives you the user full control of your private keys. With these private keys you will be able to retain control of both sets of coins when and if a fork takes place.

Since Exodus is a light-wallet that depends upon information from other services like ShapeShift, BlockCypher, and Bitpay Insight Exodus is dependent upon their decisions. Until we know the position of each service, we are unable to give a firm position.

Again, we want to stress, the power of Exodus is it gives you the user 100% control over all assets. No matter what Exodus as a company decides to do in a fork situation you always have and maintain full control and management of your assets.

Last updated: Tuesday, May 30th, 2017


Read more about the BIP 148 and UASF on