Segwit Reading Assignment

[CryptoVic]

filip

1

Jun '19

It’s time for a reading assignment about Segwit. Read through the following article https://www.coindesk.com/information/what-is-segwit , and answer the following questions.

1. What was a proposed alternative to Segwit? An increase to the block size.
2. What did Segwit solve more than just the scaling issue? In addition to allowing more data per block, Segwit solved the malleability issue, and made second layer protocols possible (such as the lightening network), it also boosted development on other features such as MAST, and Schnorr.
3. How is Segwit and the Lightning network connected? The lightning network is a second layer protocol built on top of the core Bitcoin protocol, increasing the transaction capacity by taking by taking frequent small tx’s offchain and settling later.
4. Are people, wallets and other services forced to use Segwit? No, although Segwit is compatible with the core protocol and avoids the need for a hard fork.

[benwenck]

1. What was a proposed alternative to Segwit?

Increase blocksize to 2mB

2. What did Segwit solve more than just the scaling issue?

It also solved the malleability issue allowing further development of layer 2 protocols like lightning network.

3. How is Segwit and the Lightning network connected?

Segwit allowed the development of layer 2 solutions by addressing the weakness of malleability.

4. Are people, wallets and other services forced to use Segwit?

No, only as they upgrade their wallet software do they then begin utilising Segwit.

[JasonB]

1. To increase block size. This would have meant a temporary fix, as miners would need more/better hardware, more storage and memory, block propagation time would increase, and more stale blocks and forks would be created.

2. Segwit also solved or improved TX vulnerability through its malleability. The signature was removed from the TX hash or ID, and instead propagates with, but separately, from the block. This now means tampered signatures do not effect the TX’s within the block or the block ID itself. But a side effect of Segwit has meant that some block sizes have exceeded the 1mB size.

3. Segwit allows for a second layer protocol like lightning network to be built on it.

4. No. Segwit adoption is optional, and is increasing. 40% of all BTC TX’s used Segwit as of DEC '19.

[Gagnon]

1. What was proposed alternative to Segwit? - increasing the block size

2. What did Segwit solve more than just the scaling issues? - transaction malleability. By removing the witness signature from the information being hashed it reduced the size of the transaction.

3. How is Segwit and the Lightning network connected? - the malleability fix made it possible for the development of second layer protocols.

4. Are people, wallets and other services forced to use Segwit? - no it was a soft fork

[Piotr]

1. Increasing the block size.
2. Segwit solve the malleability problem.
3. Segwit made the Lightning network possible.
4. No, traditional transactions still can be done.

[sargold]

1. Increasing the block size to 2mb
2. malleability
3. Segwit allowed for the lighting network to be possible with bitcoin and boosts transaction capacity.
4. The more segwit becomes adopted by wallets and users the more it will integrate into the network.

[Vidmantas]

1. What was a proposed alternative to Segwit?
   Increase in block size
2. What did Segwit solve more than just the scaling issue?
   Transaction ID malleability
3. How is Segwit and the Lightning network connected?
   Segwit made second layer solutions possible
4. Are people, wallets and other services forced to use Segwit?
   No

[Murugan]

1- The increasing of block size
2- Transaction malleability
3- Segwit allowed second layer solution such as lighting network
4- No however it is more convenient and useful to do so

[Morgan]

1. What was a proposed alternative to Segwit?
   To increase block size.
2. What did Segwit solve more than just the scaling issue?
   Transaction id malleability was solved.
3. How is Segwit and the Lightning network connected?
   Segwit allows for second layer solutions (lightning network) on top of the btc blockchain.
4. Are people, wallets and other services forced to use Segwit?
   No.

[Kieran]

1. The alternative to Segwit was to increase the block size. This would have been a far less elegant solution, however.

2. The ‘Malleability’ issue was a way that bad actors could retrospectively ‘spoof’ the blockchain by altering the signature portion of the TX Information in an incoming TX. Altering the ‘scripsig’ portion once the TX had been broadcast from the sender’s wallet would result in a different hash being generated, consequently invalidating the TX to the chain. The bad actor could then claim to have not received the TX. The sender might then send a second TX for the same amount, the original TX now being no longer visible [but still valid], with the bad actor banking both transactions.

3. Segwit allows for second layer solutions to be built on top of the blockchain. Lightning is such a solution, made possible by these new updates, and other applications will now be easier to develop and more secure to use.

4. No-one is forced to use Segwit as it was conducted as a soft fork, making it backwards compatible with the blockchain. The TX block remains at 1Mb with an ‘attached’ file for the signatures - capped at 3Mb. Most wallets have now implemented it.

[edit - note to self; https://bitnodes.io/ ]

[CryptoVerge]

1. Increased block size via a hard fork
2. Malleability exploit
3. It allows for a use case because of the increased reliability of zero block confirmed transactions.
4. No

[5th_Ronin]

1. The proposed alternative for Segwit was an increase of the block size, which later many agreed on being just a very temporarily solution. The community considering that solution the best, agreed on a hard fork eventually, this was the beginning of Bitcoin Cash (BCH).

2. The second issue with Bitcoin at that time was a small data that could be exploited and altered in the advantage of the receiver of a transaction, this piece of data was the scripsign (digital signature of the transaction). Originally this signature was included in the data being hashed through SHA-256, but eventually the fact that the signatures were moved outside of the transactions by Segwit, not only made the transaction take smaller space but the alteration of the signature now became adverse.

3. The malleability solution made it much more secure for second layer solutions to be built on top of the network, due to the fact that these solutions are very dependent on unconfirmed transactions being secured during the time they are batched and propagated.

4. As Segwit turned out as a soft fork, this means that nobody is forced to use the upgraded version of the blockchain. Because it is backwards compatible, the people and wallets choosing to stay with the old version are not cut off the network and their transactions fit within the new consensus rules.

[goathanger]

1. Larger block size.
   2.Tx Malleability.
2. Segwit made lightning possible.
3. No its a soft fork.

[Tommy]

1. The proposed alternative to Segwit was larger block size. BCash was a huge alternative that a lot of people wanted.

2. Segwit also solved bitcoin Malleability. By removing the signatures from the transaction people can’t change the anything in the actual transaction after they have received a transaction.

3. Segwit made it possible for layer 2 transactions which allows the lightning network and schnorf signatures . because it made unconfirmed transactions less risky.

4. No one is forces to use Segwit. Wallets have been able to adopt the update on their own time table.

[boomfist]

1. raising the maximum blocksize, (what bch did, raising the maximum blocksize to 2mB)

2. the malleable signature problem. the recipient of a transaction could adjust the signature script of the transaction and in that way could show the original transaction with that transaction ID never happend, while the actual transaction did happen but is just disguised under another transaction ID.

3. it makes it safer and easier for lightning network to work with uncomfirmed transactions. how this happens i guess we will learn in the next video

4. no, the basic rules of the protocol did not change, the transaction within them just got a little slimmer.
   so they all could use the pre-segwit mechanism too if they prefer for any reason.

[Enriquee28]

1. What was a proposed alternative to Segwit?

This was the increasing of the total block size to 2 MB.

2. What did Segwit solve more than just the scaling issue?

This also solved the malleability issue by removing the signature to the outside of the blocks and assists in preventing any fraudulent tampering of the data.

3. How is Segwit and the Lightning network connected?

Segwit allowed a second layer protocol (lighting network) to be built on top of BTC

4. Are people, wallets and other services forced to use Segwit

No because it was a softfork

[Fabrice]

part1

@Xav

2- It solved the malleabiliy issue which is still unclear to me:
a- i understand that the issue was the possibility earlier to apprently change the signature info in the transaction which resulted in the change of the transaction ID.
b- however, i don’t understand how the article write that this was not a critical issue for bitcoin!!! How could it not be considered as critical if anyone could change the transaction and steal others’ bitcoins? How could people use the bitcoin network and make payments on it, despite knowing about this issue?

You couldn’t really steal coins. You could only mislead people who check on a certain Transaction ID to check if the transaction has happened or not.

While transactions are signed, the signature does not currently cover all the data in a transaction that is hashed to create the transaction hash. Thus, while uncommon, it is possible for a node on the network to change a transaction you send in such a way that the hash is invalidated. Note that this just changes the hash; the output of the transaction remains the same and the bitcoins will go to their intended recipient. However this does mean that, for instance, it is not safe to accept a chain of unconfirmed transactions under any circumstance because the later transactions will depend on the hashes of the previous transactions, and those hashes can be changed until they are confirmed in a block (and potentially even after a confirmation if the block chain is reorganized). In addition, clients must always actively scan for transactions to them; assuming a txout exists because the client created it previously is unsafe.

I don’t understand how Segwit works: How can you now verify the transaction if the signature is not part of it? How do you reconcile the message and the signature now that they are on different blocks?

The signature is still in the block, but in a different data structure that doesn’t get included to produce the Transaction ID

Andreas Antonopolis Explaining Segwit and transaction malleability

[majstr]

1. A proposed alternative to Segwit was increasing the block size cap to allow bigger blocks to be added to the blockchain (later became bitcoin cash fork).

2. Segwit solved a lot more then just scaling issue. It fixed the txs malleability problem (by removing the signature info from the base block), introduced “block weight” and most of all it allows the development of 2nd layer protocol upgrades such as Lightning network, MAST or Schnorr signatures.

3. Both enable for the boost in the bitcoin network transactions capacity.

4. No, as Segwit was a soft fork. But more and more people and wallets are supporting the upgrade.

[4-Freedom]

1. Simply increasing the block size.

2. It removed the possibility of altering the TXID without altering the actual transaction, which was being used to scam unknowing users.

3. Lightning network is dependent on TXIDs being unchangeable once broadcasted.

4. No, because it is a soft fork.

[Roger_Jiang]

1. What was a proposed alternative to Segwit?
   A proposed alternative to Segwit is to increase the block size by performing a hard fork. A typical example is Bitcoin Cash (BCH).
2. What did Segwit solve more than just the scaling issue?
   Segwit solve both scaling issue and malleability issue.
3. How is Segwit and the Lightning network connected?
   Segwit makes a second layer solution such as lightning network possible.
4. Are people, wallets and other services forced to use Segwit?
   No, nodes are opt-in to update. There are still some old nodes running without any update.