SegWit or segregated witness is a scaling update which was activated on the Bitcoin network over a year ago. However, an estimated 36% of bitcoin transactions are done using this, which was very much unexpected from SegWit. Hence, it would be interesting to know the probable reasons behind it.

The least adoption rates of SegWit are might be because similar to any other soft fork or backward-compatible update, SegWit allows its bitcoin network participants (those who haven’t updated to the software) to still run on the same network; but, under a lesser-restricted set of rules.

Hence, a few bitcoin organizations and exchanges have kept the thought of making the switch aside. The updates would enable SegWit transactions to use the low-fee features when sending bitcoin payments; however, it is not appealing enough for businesses to adopt the new version.

Some of the companies (supported by venture capital) don’t care about paying bitcoin fees, said Rusty Russell, a developer at Blockstream. He stated that people expense a million dollars every week on bitcoin fees; but, nobody really bothers about it. For them, the numbers of user adoption are of importance.

Aaron Lasher, an executive working in BRD (bitcoin wallet company), doubts that if the bitcoin price increases in future, then the pressure on the business organization to make use of SegWit update would increase.

He further said that the companies are feeling any need to use SegWit as it doesn’t really make a big difference at present. But they will during the bitcoin price run-up. However, how much time will it take, is to be seen!

According to Lasher, as Tyler Winklevoss, of Gemini has said, trying to fit exchange wallets with SegWit was a tricky job.

One part of the bitcoin community which denied approving of SegWit has focused on an alternative cryptocurrency called bitcoin cash. A few bitcoin mining companies (especially Bitmain) were all against the activation SegWit update on Bitcoin. However, considering the present scenario, one cannot deny the financial incentives miners get from validating SegWit-enabled transactions.

SegWit-powered transactions can sum up around 40 percent of the total transactions conducted on the bitcoin network, and it means that transactions which are deliberately excluded for whatever reasons, would decrease the total mining reward reaching miners for validating a new block.

However, cutting a long story short, Lasher said that adopting a new update is like learning a new and completely alien language; this exactly is one of the reasons which is stopping most of the businesses and exchanges to activate SegWit.