Partially Segregated Transactions: A Look into Ethereum's Segwit Limitations

Ethereum, like other blockchain networks, has faced criticism for its lack of support for partially segregated transactions (PST). The protocol, introduced in 2017 as a result of the hard fork between Ethereum Classic and Ethereum, has struggled to accommodate more than a single UTXO per address. However, some users have found ways to work around this limitation, although with limitations.

Understanding Segregated Transactions

Segregated transactions allow for separate UTXOs (unspent transaction outputs) to be associated with the same output. This is in contrast to segregated addresses, which are used to specify a set of addresses where funds will be split between different blockchains or wallets.

In Ethereum's current implementation, UTXOs from Segwit addresses and non-Segwit addresses can coexist on the same wallet, but they cannot be mixed together. If an address has both Segwit and non-Segwit UTXOs, only one of them is considered valid for spending.

Bitcoin Core V0.15 Wallets: The Bitcoin Cash Side of the Story

When it comes to wallets supporting Bitcoin Cash (BCH), some have found ways to work around Ethereum's segregation limit. A wallet with coins in Segwit can be used with BCH, and the user can separate their Segwit and non-Segwit UTXOs.

Here are a few examples:

• In 2017, one user experimented with using a Bitcoin Cash wallet on an Ethereum node to receive Segwit-based transactions from an Ethereum address.

• Another user reported finding that their Bitcoin Cash wallet could accept Segwit-only UTXOs from another wallet.

• However, it's essential to note that these solutions are not without limitations. The user would still need to ensure that the non-Segwit UTXO is spent or included in a valid transaction.

Partially Segregated Transactions: A Complex Issue

While some users have found ways to work around Ethereum's segregation limit with BTC wallets, partially segregated transactions (PSTs) on Ethereum are not currently supported. PSTs involve splitting a single UTXO between two different addresses. On Bitcoin Cash, PSTs are possible due to the network's use of Segregated Addresses.

The lack of support for partially segregated transactions on Ethereum is primarily due to the complexity and technical challenges involved in achieving this feature. The current implementation requires significant changes to the underlying protocol, including:

• Revising UTXO storage and validation logic

• Introducing new address types to accommodate PSTs

• Updating wallet software to handle the additional logic

Conclusion

While partially segregated transactions are not currently supported on Ethereum, some users have found ways to work around this limitation with Bitcoin Cash wallets. However, this requires careful handling of both Segwit and non-Segwit UTXOs.

As the ecosystem continues to evolve, it's likely that we'll see improvements in support for partially segmented transactions on Ethereum. Until then, users with BCH wallets may need to consider alternative solutions or wait for a future upgrade to support PSTs.

References:

• "Segregated Transactions" (Ethereum Whitepaper)

• “Bitcoin Cash Wallet – Segregated Addresses” (Bitcoin Cash Wiki)

• "Ethereum Segwit Limitations" (Ethereum Stack Exchange)