3. What are the main arguments against SegWit?

The key ‘against’ points can be roughly divided into three groups: technical, political and ideological.

Some have argued that SegWit, in its current state, will not be able to solve the problems it promises to solve. One of the primary arguments here is that the block size increase proposed by the update is not nearly enough to satisfy the growing needs of Bitcoin’s user base.

The majority of the experts seem to agree about the high technical competence of the authors of SegWit, as well as the solidity of the technology itself. However, it is nearly impossible for a person who is not a programmer to evaluate the authenticity of the arguments proposed by both sides.

The fact that the debate is now not purely technological but has a political aspect too only complicates things. A large number of people working on SegWit are also employed by a company called Blockstream, whose primary product is sidechain solutions.

Some from the community claim that this creates a conflict of interest, as the developers are incentivized to obstruct attempts at increasing the block size, in order to artificially increase the demand for sidechain solutions, such as the Lightning Network. There is no definitive proof for this claim but a large part of the community has still chosen to believe in it and is opposing SegWit as a result.

The main ideological argument, leveled against the update, is that it does not provide scalability while preserving a sufficient degree of decentralization of the Bitcoin network. As has been said earlier, SegWit solves the long-term problems with Bitcoin’s insufficient transaction capacity only insofar as allowing for implementation of second-layer sidechain solutions, such as the Lightning Network.

The problem some people see here is how the sidechains work. In order to not rely on the highly congested Blockchain, they move the coins to a second-layer system. There, all transactions are processed by a trusted third party, without having to broadcast them across the entire network, which saves a lot of resources and time.

But a trusted point of authority in charge is exactly what Bitcoin was meant to remove from the monetary system. For some, that is an unacceptable compromise, no matter how little power the third party wields in solutions such as the LN and others.