On 6th of April, in the rather nice Citibank building on Dublin’s quays, fellow Dublin blockchain company Chainsmiths held a reading of the SegWit proposals, with a readthrough of BIP141, BIP142 and BIP143. This was organised via the Dublin Bitcoin Meetup Group, and it’s nearby to me in Dublin, so I went along.
While I was there, there were about 15-20 people in attendence including the organisers, in one the Citibank Innovation Lab meeting rooms. It seemed a mix of finance, development and general interest in the audience. The organisers on the night according to the group were Citibank’s Aman Kohli, Chainsmith’s Peter Wuille, and Thomas Kerin.
So arriving in reception, there were a couple of people around so I had a chat, and then we all went into the meeting room for the reading. After getting set up, Peter proceeded to talk through the first BIP in SegWit, with BIP141. This was fairly technical in nature, and he answered questions about it from the audience on the day.
I was there for the first of three, so didn’t get the other two, but BIP141 talks about the Elements project, also known as Segregated Witness. The goal of this is to reduce the space of the existing blockchain block size by a factor of four, by reworking some of the elements of how transactions are recorded. This would allow the same block size to see approximately quadruple the transactions on it.
It proposes to separate out authorisation from signature data, and the base transaction data. There is information here that is in excess to actually checking a transaction is valid, taking up 60% of the kilobytes in a transaction. It aims to address the question of how the network can get bigger, over 7 transactions per second, and then being processed in a following block.
In this case, something like the lightning network sits on top, looking at interconnected transactions, and then in batches it can process the changes in ownership, meaning lower fees per individual transaction. On this separate network, the participants can check between themselves, and in the event of uncertainty, check against the state of the main transaction on the ledger. This could participants to work together only be charged fees when the system reconciles itself with the main blockchain.
This could also allow a better use of the same transaction space, and at the same time address non-intentional malleability of transactions, and also make signatures optional on some transactions. This could also feed into thin clients, ie on a mobile phone, where a device is referencing a few things, not downloading the entire blockchain.
By adding some extra information to the coinbase transaction, the main network can continue to hold the coins on the blockchain, letting new nodes propegate the information. I had to leave then, but I imagine it continued on for another hour or two. Sign up to the Dublin Bitcoin Meetup for information on other similar meetups happening in Dublin