Segregated Witness (SegWit)

What Is Segregated Witness (SegWit)?

Segregated Witness (SegWit) is an enhancement to the Bitcoin protocol aimed at addressing scalability and security concerns. Proposed by Bitcoin developer Pieter Wuille in 2015 and activated as a soft fork in August 2017, SegWit separates transaction data from digital signature data, known as "witness" data. This separation effectively increases the block size from 1 MB to about 4 MB, leading to improved transaction speed and capacity. Moreover, SegWit resolves transaction malleability, paving the way for the development of second-layer protocols like the Lightning Network.

Key Features

Increased Block Size:

Segregates witness data, effectively increasing the block size, resulting in more transactions per block and higher transaction speeds.

Transaction Malleability:

Prevents unauthorized alteration of transaction IDs, ensuring data integrity and facilitating advancements in second-layer solutions.

Implementation:

Implemented as a soft fork, ensuring backward compatibility as an upgrade.

Controversy and Impact:

Controversy:

- The introduction of SegWit sparked debates within the Bitcoin community and contributed to the creation of Bitcoin Cash, a fork that did not adopt SegWit.

- Critics argue that SegWit's complexity might introduce vulnerabilities.

Positive Impact:

SegWit enhances Bitcoin's scalability and transaction throughput, allowing for innovative developments such as the Lightning Network for faster transactions.