Episode notes
In this episode of Bitcoin, Explained, Aaron (@AaronvanW) and Sjors (@provoost) explain why the witness discount was included in the Segregated Witness protocol upgrade from 2017, why this discount is 75%, and why this discount still makes sense in today’s world where Inscriptions benefit from it.
Chapters
00:00:00 Why the witness discount exists
00:03:25 SegWit recap: separating signatures from transactions
00:08:56 Why separate block limits complicate the fee market
00:13:42 How the discount and block weight work
00:17:15 UTXO incentives: making coins cheaper to spend
00:23:59 Why a 75% discount? Validation and network limits
00:28:31 Pruning and skipping historical witness data
00:32:41 Worst-case blocks versus a hard fork
00:36:57 Inscriptions, OP_RETURN and the case for the discount
00:44:29 Reconstructing the original SegWit rationale
Episode Sponsor: https://voltage.cloud/ Sjors New Book: https://www.amazon.com/Bitcoin-Technical-innovations-Sjors-Provoost/dp/9090360425
