Segregated witness softfork with moderate adoption has very small block size effect

Summary:

The author of the text has done some calculations on the effect of a SW softfork on the actual total block size. They have defined several terms including core block size, witness size, total block size, and virtual block size. By using these terms, they were able to show that CBS and VBS are related to WA and PR. Sipa suggested a 25% discount factor for witness. The PR depends heavily on the transaction script type and input-output ratio. Assuming WD=25% and PR=60%, the maximum TBS with different MAX VBS and WA is listed in a table provided in the text.With moderate SW adoption at 40-60%, the total block size is 1.32-1.56MB when MAX VBS is 1.25MB, and 1.22-1.37MB when MAX VBS is 1.00MB. However, P2SH has only been introduced for 3.5 years, and only about 10% of bitcoin is stored this way. Therefore, a 1-year adoption rate of 40% for segwit is over-optimistic unless the tx fee becomes really high.The author also notes that the PR of 60% may be over-optimistic since using SW nested in P2SH will decrease the PR, and therefore, TBS becomes even lower. Finally, the author is not convinced that SW softfork should be the *only* short term scalability solution.

Updated on: 2023-06-11T02:26:00.069703+00:00