Segregated Witness (SegWit) is a significant protocol upgrade for Bitcoin, first proposed in December 2015 by the Bitcoin Core development team. It is a soft fork that changes the way Bitcoin transactions are stored and validated on the blockchain. SegWit was designed to improve Bitcoin scalability, reduce transaction fees, and increase network security.
At its core, SegWit is a technical improvement that modifies the way data is stored on the blockchain. Currently, all transactions include a scriptSig which contains the unlocking signature and a scriptPubKey which contains the locking script. SegWit splits the scripts into two separate parts, the witness and the block. The witness contains the unlocking signature and related data, and the block contains the locking script and other transaction data. This allows for a more efficient use of space on the blockchain, resulting in a decrease in the amount of data that needs to be stored for each transaction.
The main benefit of SegWit is that it increases the capacity of the Bitcoin network, allowing more transactions to be processed. This is done by reducing the amount of data that needs to be stored on the blockchain. This in turn reduces the size of each block, allowing miners to process more transactions per block and allowing more transactions to be confirmed in a given amount of time. This should reduce the amount of time it takes for transactions to be confirmed, as well as reducing the fees associated with transactions.
In addition to increasing scalability, SegWit also has a number of security improvements. First, it eliminates the risk of transaction malleability, which is a process by which transactions can be modified before being confirmed on the blockchain. This is done by separating the witness data from the block data, making it more difficult for a malicious actor to manipulate. Additionally, SegWit also introduces a new signature scheme, known as Taproot, which improves the privacy of transactions by making it more difficult to determine the sender and recipient of a transaction.
SegWit is an important protocol upgrade for Bitcoin that offers significant improvements to scalability, security, and privacy. It increases the capacity of the Bitcoin network, allowing more transactions to be processed in a given amount of time, while also introducing new security measures to protect users from malicious actors.
References:
1. What is SegWit? A Comprehensive Guide. (2020, August 18). Retrieved from https://www.coindesk.com/information/what-is-segwit
2. Glatz, A. (2020, May 22). What is SegWit? Retrieved from https://blockgeeks.com/guides/what-is-segwit/
3. Segwit: What is it? How does it work? (2017, May 29). Retrieved from https://bitcoinmagazine.com/articles/segwit-what-it-how-does-it-work/
