ViaBTC Explains Why They Don’t Support SegWit

ViaBTC’s latest blog post sheds some light on why the mining pool is opposing the Bitcoin scaling proposal, SegWit.

ViaBTC, Bitcoin Core and SegWit

ViaBTC just published a blog post in which they explain the reason behind their opposition to SegWit, citing the concerns regarding the complexity of the soft fork, the irreversible damage it may and the introduction of second-tier networks like Lightning Network. The mining pool also mentions Bitcoin Core’s impact on Bitcoin and the community as a negative, claiming that they are “abusing their previous influence”. The post reads:

Today, Bitcoin is in urgent need of diversified dev teams and implementations to achieve decentralization in Bitcoin development.

As companies and mining pools choose their side of the debate, SegWit or Bitcoin Unlimited, most have released statements regarding which solution they are backing and why. While most companies favor the activation of SegWit, mining power has been on the side of BU. Among the pools that support BU, Antpool and ViaBTC have been two of the most vocal regarding Bitcoin Core and the Segregated Witness proposal. On ViaBTC’s transaction accelerator page, a popup service statement reads:

ViaBTC is of the opinion that the current “Bitcoin Core + Blockstream” Bitcoin development team is not taking satisfactory steps to ensure the growth and advancement of Bitcoin in accordance with satoshi’s original white paper, and is in fact actively harming the health of the Bitcoin economy by actively stifling efforts to solve some of Bitcoin’s most pressing problems.

“SegWit doesn’t solve the most urgent capacity issue”

In the latest blog post dubbed “Why we don’t support SegWit”, ViaBTC states that SegWit is a soft fork solution for transaction malleability and that it cannot solve the current network overcapacity problem which is currently the most urgent issue in the Bitcoin network.ViaBTC goes on to state that second-tier networks like Lightning Network cannot be considered as a block scaling solution. The blog post reads:

LN transactions are NOT equal to Bitcoin’s peer-to-peer on-chain transactions and most Bitcoin use scenarios are not applicable with Lightning Network. LN will also lead to big payment “centers”, and this is against Bitcoin’s initial design as a peer-to-peer payment system.

However, the SegWit is not Lightning Network (LN). SegWit introduces a much-needed fix for a pressing issue in Bitcoin, which is transaction malleability. This fix would allow LN to be implemented in Bitcoin.

Bitcoin network overcapacity

However, ViaBTC seems to be missing some very important points. The introduction of a patch to one of Bitcoin’s bugs should not be considered as harmful just because it allows developers to build a second network on top of Bitcoin. Bitcoin should be cleared of bugs like transaction malleability and developers should be free to build whatever they want (which is what has happened so far) on top of Bitcoin.

The fact that a mining pool would block an important fix like this due to the possibility of losing out on transaction fees is, at best, selfish. ViaBTC also seems to have missed the fact that some forms of second-tier networks are already possible in Bitcoin, even without the transaction malleability fix, and are being developed right now. Lastly, one should also note that without these channels, users that are looking for the advantages they would provide will find them elsewhere either through altcoins or centralized payment systems, which can only result in the loss of use cases for Bitcoin with nothing gained.

ViaBTC’s statement that “SegWit doesn’t solve the most urgent capacity issue” is, however, correct. While it may be considered as a “quick-fix” that will double the network’s capacity, further updates will have to be made in the future. This is where Bitcoin Unlimited seems to please its supporters, their Emergent Consensus protocol proposes a fix that is somewhat “permanent” as it allows the block size limit to change according to demand.

“SegWit makes it harder for future block scaling”

Here, ViaBTC cites some real concerns regarding the possibility for future scaling updates which are indeed made harder by SegWit’s changes. SegWit allows blocks to reach a 4MB limit due to the way witness data is accounted for. However, this limit is not meant to be reached, as the only data that is read differently is the witness data and not the tx. inputs and outputs. This results in a ~2MB block limit under regular circumstances.

This means that a possible attack vector is to create 4MB block which is a problem for the network. So, any future increases, for example from a ~2MB limit to a ~4MB limit, will theoretically allow a block that is four times bigger to be created, in the example above this would mean a ~16MB limit. This, however, is extremely unlikely and is not seen as a problem for Bitcoin Core developers.

The problem is that if a way to implement this attack did come along, SegWit could not be reversed. The blog post reads:

On technical terms, SegWit uses a transaction format that can be spent by those who don’t upgrade their nodes, with segregation of transaction data and signature data. This means SegWit is irrevocable once it’s activated, or all unspent transactions in SegWit formats will face the risk of being stolen.

While this may be a real concern to a certain degree, the prospect of an attack vector that is currently considered impossible and would theoretically become a problem once the network implements a second scaling update, which may never happen, doesn’t seem to be a valid reason for blocking SegWit.

“SegWit will deepen Core’s impact on the community”

In the last section of the blog post, ViaBTC states its concerns regarding the Bitcoin Core development team and its influence on the Bitcoin community, citing problems like the infamous censorship perpetrated by Bitcoin Core on Reddit and Bitcoin forums. This seems to be completely off from what Bitcoin is supposed to be, a global apolitical currency.

Bitcoin forums, boards and development teams are not part of Bitcoin. They are exterior to the network. If there is indeed censorship going on in these places, users should abandon them. If the Bitcoin Core team is trying to turn Bitcoin into a centralized payment system (or whatever), the community/miners should not approve their updates. However, rejecting an update based on the developer that proposed it, and not on the actual code, is childish. This reason could easily be turned around on the Bitcoin Unlimited development team, which has had its fair share of controversy.


While we do believe that both scaling proposals have their strengths and weaknesses, ViaBTC’s concerns regarding SegWit seem to be non-existent at best: Blocking transaction malleability is a malicious act on the network. Opposition to SegWit should be based on the problems it will cause the network and not on the problems it could theoretically cause if a currently-nonexistent attack vector is eventually found. Lastly, users should decide what is best for the network and not whom, that’s the beauty of Bitcoin.

Do you think that ViaBTC is right and that we are missing the point? If so, let us know in the comment section.

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Source: Bitcoinist