What is the Witness Discount?

that Witness discount It represents the decrease in the data “weight” provided to the witnesses of the Bitcoin Transaction, which includes signatures used to prove ownership. This discount, embodied as part of the 2017 SEGGREGATED WITNESS upgrade, effectively reduced the cost of SEGWIT by establishing less witness data when calculating the total size of the transaction.

In short, the witness data receives a 75% discount. In other words, when determining how much space is in the bitcoin block, it is calculated only one quarter of the actual size. This enables more transactions per block and reduces the cost of users who adopt the SEGWIT support wallet.

But why is a witness discount at first? What is the point that gives this special treatment to the witness data? The answer is associated with Bitcoin’s long expansion problem, and is related to the need to increase the transaction capacity without checking the dangerous hard fork. In this article, we explore the purpose of the Witness Discount, how it works, and the reason why it is important today.

Main takeout

• Witness discount: The discounts applied to the scale of the “witness” (or signature) of the bitcoin transaction reduce the fee.
• Part of SEGWITThe Witness Discount is part of Segwit (Seggregated Witness), and the long trading has solved the compulsion problem and effectively increased the block size of Bitcoin.
• Expansion: Bitcoin transactions are more efficient to help allow more transactions per block.

Witness discount

The Witness Discount has been introduced as part of SEGWIT, a major upgrade of the Bitcoin protocol, which separates transaction data into core transaction data and two parts of witness data (mostly digital signatures). In essence, the witness data received a “discount” depending on how much it is calculated for the entire block size.

Bitcoin’s block size was limited to 1MB before Segwit. Segwit has increased indirect block size by applying a lower “weight” to the witness data, so that more transactions per block without exceeding the 1MB limit of non -Segwit node.

Witness discounts achieve important goals. This allows more transactions to be suitable for blocks, allowing them to maintain compatibility with previous nodes that have not been upgraded to Segwit.

Operating

When Bitcoin Transactions occur, the core elements of the relevant transactions, such as the amount related to the amount of Bitcoin transmitted, are recorded. But there is another component called “Witness”, which saves a signature that proves the ownership of the transferred Bitcoin.

• Follow: Before Segwit, all parts of the transaction were treated the same depending on how many spaces they spent on the block.
• After following: After segwit, the witness data (signature) has been stored separately from the rest of the transaction data. This separation is assigned a lower weight to the witness data and receives a 75% discount effectively, allowing more transactions to the block. The entire transaction of Segwit, which can occupy 300 bytes, now contributes to the small amount of that size to the total weight of the block.

This is due to the decrease in the fee of the user who selects the Segwit support wallet because the fee is calculated according to the virtual size of the transaction.

History and theoretical basis

The story behind the Witness Discounts goes back to the block-size war in 2015-2017. At that time, the Bitcoin community was involved in a violent debate on how to expand the network. The larger block size allows more transactions per block, but it was controversial to increase the block size directly (through hard fork). The larger blocks were more difficult to spread and store for nodes with low bandwidth and storage, so we centralized the network.

SegwattWhat Pieter Wuille suggested was introduced as a compromise. We made a “valid” block space without hard fork to solve the scaling problem. This is where the Witness Discount becomes important. Segwit effectively expanded the number of transactions that fit the block while maintaining compatibility by discounting witness data.

In short, Segwit allowed Bitcoin to eat it with a cake. More transactions per block that is risk of unstable network.

Advantages and disadvantages

Advantages:

1. Increased block efficiencyThe Witness Discounts are compatible with unparalleled nodes by allowing more transactions per block to indirectly increase the block size of Bitcoin.
2. SEGWIT users’ fees are low: Witness data is low in weight, so SEGWIT transactions are small, so the user’s transaction fee is low.
3. Improved security: SEGWIT has solved the transactionic problem, making Bitcoin transactions more safer, especially for two scholar solutions such as lightning networks.
4. Expansion improvement: By reducing the data burden of each transaction, the Witness Discount improves the scalability of the bitcoin network.

disadvantage :

1. complexity: SEGWIT implementation, including witness discounts, adds complexity to the protocol.
2. Not completely adoptedThe Witness Discounts encouraged the use of Segwit, but many wallets and exchanges have been slow to adopt this, which is not universally experienced.

Witness Discountable Block Size increases

One of Bitcoin Scaling Saga’s main debate is whether it will increase the size of the block or to implement solutions such as Segwit or to indirectly increase the block size. So how is the Witness Discount Compared to simply increasing the size of the block?

Block size increase:

• Direct increase in the number of transactions that blocks can hold.
• More storage and bandwidth are required to increase the burden of nodes and catch the network.
• You need a hard fork that can split the network (for Bitcoin cash).

Witness Discount (Segwit):

• Achieve similar results (increased transaction capacity) without hard fork.
• Reduce the cost of transactions for users using Segwit.
• It does not impose an additional burden on the node, so it is more sustainable in the long run.

In essence, the Witness Discount achieves the goal of more transactions per block without damaging the dispersion of Bitcoin, the main doctrine of network design philosophy.

Frequently asked questions (FAQ)

Why is the witness 75%off?

Witness data (witness data containing digital signatures) has a 75%discount because the node does not contribute to the long -term size of the UTXO set that must be permanently stored. This data is only for transaction validation and can be discarded later, so it has a lower impact on node resources than non -waist data.

If you use the Segwit upgrade, the transaction size is measured in weight units (WU), not byte. Non -surge data is assigned a weight of 4 WU per byte, and witness data is assigned to 1 WU (1: 4 ratio) per byte. This is effectively calculated as the witness data is 25% of the original size and receives a 75% discount.

The choice of 1: 4 weight was deliberately balanced between adoption of incentives, network efficiency preservation and security maintenance. This allows more transactions per block to ensure compatibility with pre -Segwit rules to improve the expansion of Bitcoin without sacrificing decentralization.

Does the Witness Discount mean that the segwit block is bigger?

Yes, the segwit block can be larger than the 1MB block limit before Segwit. However, the method of calculating the block weight means that the segwit block is more efficient for data storage, so more transactions that do not calculate more weight than before can fit the block.

What happens if you don’t use Segwit?

Non -SEGWIT transactions do not benefit from witness discounts, so it takes up more space in the block and usually generates higher fees. But it is still completely valid and can be handled on the network.

Are the Witness Discount stay here?

At this time, there is no plan to remove the witness discount. It remains an important part of Bitcoin’s expansion strategy and is widely known to have succeeded in improving the efficiency of the network without damaging decentralization or security.