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Edited appdx-segwit.asciidoc with Atlas code editor

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nadams 2017-05-18 06:46:33 -07:00
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appdx-segwit.asciidoc
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@ -68,7 +68,8 @@ In <<cup_of_coffee>>, Alice created a transaction to pay Bob for a cup of coffee
DUP HASH160 ab68025513c3dbd2f7b92a94e0581f5d50f654e7 EQUALVERIFY CHECKSIG DUP HASH160 ab68025513c3dbd2f7b92a94e0581f5d50f654e7 EQUALVERIFY CHECKSIG
---- ----
With Segregated Witness, a P2PKH output, is created instead a Pay-to-Witness-Public-Key-Hash (P2WPKH), which looks like this: With Segregated Witness, Alice would create a Pay-to-Witness-
Public-Key-Hash (P2WPKH) script, which looks like this:
.Example P2WPKH output script .Example P2WPKH output script
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@ -352,4 +353,4 @@ Let’s look at an example of what incentives are created by the transaction fee
Both transactions are less expensive when segregated witness is implemented. But comparing the costs between the two transactions, we see that before Segregated Witness, the fee is higher for the transaction that has a negative Net-new-UTXO. After Segregated Witness, the transaction fees align with the incentive to minimize new UTXO creation by not inadvertently penalizing transactions with many inputs. Both transactions are less expensive when segregated witness is implemented. But comparing the costs between the two transactions, we see that before Segregated Witness, the fee is higher for the transaction that has a negative Net-new-UTXO. After Segregated Witness, the transaction fees align with the incentive to minimize new UTXO creation by not inadvertently penalizing transactions with many inputs.
Segregated Witness therefore has two main effects on the fees paid by bitcoin users. Firstly, segwit reduces the overall cost of transactions by discounting witness data and increasing the capacity of the bitcoin blockchain. Secondly, segwit’s discount on witness data correcting a misalignment of incentives that may have inadvertently created more bloat in the UTXO set.((("", startref="segwit16"))) Segregated Witness therefore has two main effects on the fees paid by bitcoin users. Firstly, segwit reduces the overall cost of transactions by discounting witness data and increasing the capacity of the bitcoin blockchain. Secondly, segwit’s discount on witness data corrects a misalignment of incentives that may have inadvertently created more bloat in the UTXO set.((("", startref="segwit16")))