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Readers may remember the legendary moment last year when Ethereum co-creator Vitalik Buterin responded to a talk by Craig Wright to call him a “fraud.” Buterin had endured enough of what he viewed to be baseless claims on the part of Wright, who at the time was talking about “dishonest miners” in the crypto economy.

Bitcoin SV Proponents Rant about “Legal Ramifications” of SegWit

As the year wore on, Craig Wright and Calvin Ayre increasingly engaged in in-fighting with Bitcoin Cash developers and community members. It became clear that another fork was going to divide the community further, and in November that happened.

Now about six months later, the Deconomy forum has allowed a panel of Bitcoin SV proponents to speak on the subject of Bitcoin scaling. In response, Buterin, who has over 800,000 followers, tweeted:

The panel included Ella Qiang, Peter Ng, David Lancashire, Jack Liu, and Jerry Chen, who manages crypto solutions for SBI Holdings. Qiang retweeted a photo of herself and others from the SV panel “being good” during Buterin’s talk.

The responses to Buterin’s tweet ranged from agreement, in the case of Bitcoin evangelist Andreas Antonopoulos, to several Bitcoin SV supporters taking offense.

Of particular discussion in the Twitter thread was the notion that Segregated Witness “separating signatures from transactions” is a legal quandary. Core developer and Bitcoin maximalist Luke-Jr pointed out that signatures aren’t indeed separated, though:

Does SegWit Separate Bitcoin Transactions from Signatures?

Segregated Witness doesn’t separate signatures from transactions. According to this answer from BitGo developer Mark Erhardt on StackExchange, which elucidates the actual handling of signatures in SegWit, signatures are simply stored differently.

“However, segwit is constructed in a forwards compatible manner. It’s made so that it is possible to produce a “stripped version” of a segwit transaction that omits the “witness”. This stripped version is a non-standard valid transaction according to pre-segwit rules. This means that pre-segwit nodes will not propagate it when it is unconfirmed, but accept it when it is included in a block. Segwit-enabled nodes would consider the stripped version incomplete and therefore depend on receiving the complete version of the transaction from another segwit-enabled node.”

Segregated Witness makes it so that signature data is part of the “witness.” It enables a smaller version of the transaction to be considered valid, which increases the speed and capacity of the Bitcoin blockchain.

Bitcoin SV proponents contend that changing the form of Bitcoin transactions has “legal” ramifications because every transaction doesn’t technically have a signature associated with it. The argument seems based on the idea that without a signature attached directly to the operation, it is not valid. However, the rules of post-SegWit Bitcoin don’t allow for non-signed transactions. The issue is more of a minor technicality, which anti-Bitcoin Core people have taken up as a seemingly-legitimate criticism of BTC.

By shifting the storage of transaction signatures in Bitcoin blocks, SegWit was able to increase the capacity of Bitcoin blocks while maintaining the 1-megabyte block size. Bitcoin Cash and Bitcoin SV proponents clearly would have preferred a simple increase in the block size.

No discussion of SegWit is complete without mentioning the “SegWit2X” or “New York Agreement,” which was an unpopular agreement by some members of the community to both enable SegWit and double the Bitcoin block size.

Some believe that a block size increase in Bitcoin is inevitable, even with the advent of second-layer scaling solutions like Lightning Network – whose transactions take up space as well.

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