One of Diar.co’s latest reports suggests that SegWit has been working. According to the data presented, BTC transaction volume is near where it was when the digital asset’s price jumped to $20,000 back in December of 2017.
Although fees have spiked 250% as more volume flows to the protocol, the report explains how SegWit has helped to keep the fees at bay.
“On-chain volume still heavily used for ramping on and off exchanges has been the main culprit as traders look for an opportunity with the price of Bitcoin rising 43% during April resulting in full blocks (see chart 3).
But SegWit, the scalability solution that addresses the issue has also hit a high with the percentage of blocks using the mechanism averaging 35% alleviating fee pressures. 2018 average SegWit usage was only 26% and only 11% at Bitcoin’s peak highlighting the continued adoption by major players.”
SegWit was designed to fight congestion on the blockchain. Since being activated, SegWit has helped to lower the price of transactions for users and businesses by increasing the amount of data that can be held on each block.
With the price of Bitcoin up 50% in recent months and volume climbing, many are anticipating a sizeable price jump. Noted trader Willy Woo also recently commented on the correlation between transaction volume and the future price of bitcoin.
Woo tweeted that a bull market confirmation would come soon.
“We also need price to be validated with on-chain volume mooning from here. We’ll likely get that confirmation soon in the next 4-8 wks.”
During the last bull run, many pointed out the slower speeds and higher fees. But if a similar bull run starts kicking up in mid-2019, this time Bitcoin will be bolstered by the work of SegWit and speed advances such as the Lightning Network. A faster and cheaper product for users and institutions alike will be needed to really send BTC into a period of exponential growth.