Segwit has been activated on the main Bitcoin chain, which still experiences record high fees and confirmation times, as well as confusion surrounding the upgrade.
Since the upgrade, which was marketed as an upgrade to scaling capacity (though more of a gateway to future off-chain scaling solutions), transaction fees have grown to record levels, as noted by Segwit2x lead developer Jeff Garzik:
— Jeff Garzik (@jgarzik) August 24, 2017
Since that tweet was posted, the fees have increased further, reaching a record high of $7.96 average transaction fee, and a median fee of $4.81. This has led to uncertainty and frustration among Bitcoin users, many of whom have been vocal in their disappointment:
Confusion remains as to the next steps forward
In addition to the problem of record-high congestion on the network, much of the Bitcoin community remains unclear as to the specifics of the Segwit upgrade, where it stands in terms of developmental adoption, what will happen short-term as a result of activation, how to properly use new transaction types, etc. Despite a thorough list of companies and services supposedly ready for Segwit, confusion remains about which ones actually support Segwit transactions right now:
Many Bitcoin users who supported Segwit activation may not have fully and accurately grasped what practical functionality the upgrade would offer, instead passing it off as a simple transaction throughput increase similar to a larger block size. Many Bitcoin fans are now learning the specifics of the upgrade they supported so enthusiastically:
Finally, to add yet more to the situation, several Bitcoin Core developers have advocated against using Segwit transactions at this stage:
PSA: If you support reducing the block size (good for Bitcoin), avoid using Segwit for normal transactions. Only use Segwit for Lightning. 😅
— Luke Dashjr (@LukeDashjr) August 24, 2017
No viable scaling in sight could shift market to other coins
With an on-chain scaling capacity increase in further doubt, and a lack of clarity as to how and when off-chain scaling will be ready for practical, everyday use, users tired of high fees and slow transaction times may look to other coins for relief. Bitcoin Cash, the chain split of Bitcoin originally meant to address this network congestion, recently handled Bitcoin levels of transaction volume for a brief period while maintaining low fees. Dash regularly ranks in the lowest cryptocurrency fees, and with ambitious plans for massive on-chain scaling may end up as a favorite cryptocurrency for regular transactions quite soon.