What Is SegWit (Segregated Witness)?
Segregated Witness (SegWit) is a protocol upgrade activated in 2017 that fundamentally changed how transaction data is stored in Bitcoin blocks. It separates (segregates) the digital signature data (witness) from the transaction data, allowing more transactions to fit in each block.
Transaction Malleability Fix
SegWit solved a critical issue called transaction malleability, where transaction IDs could be slightly altered before confirmation. This fix was essential for enabling advanced features like the Lightning Network.
Key Benefits
Increased Capacity
By moving signature data outside the main transaction block, SegWit effectively increases block capacity from 1MB to approximately 4MB, allowing more transactions per block.
Lower Fees
SegWit transactions are smaller in size, resulting in lower transaction fees. Native SegWit addresses (starting with "bc1") offer the most efficient format.
SegWit is backward compatible, meaning older Bitcoin software can still interact with SegWit-enabled nodes. It paved the way for further improvements like Taproot and enhanced Bitcoin's scalability without requiring a hard fork.
Quick Facts
- •Activated in August 2017
- •Increases effective block size to ~4MB
- •Fixes transaction malleability
- •Enables Lightning Network