SegWit, or Segregated Witness, is a core technology upgrade deployed to the Bitcoin network in order to improve scalability and reduce transaction fees. Through this upgrade, the Bitcoin blockchain is able to process more transactions faster and with lower fees than before.
In a nutshell, SegWit was implemented by separating a signature, also known as a “witness”, from a data block and pushing that signature to the end of the block. This decreases the size of the transaction and therefore decreases the amount of data that needs to be processed in order to store it on the blockchain.
The blocksize was also increased from 1MB to 4MB to scale Bitcoin further in the future. It also helps speed up processing time since there is less data that needs to be recorded each time. Additionally, by separating the signature from the block, SegWit allows for more efficient use of block space and reduces the prevalence of “transaction malleability”.
This refers to the ability of someone to alter a transaction ID after it has been broadcasted by miners to the network, leading to confusion and potential problems. Lastly, SegWit also provides additional features such as allowing for a new scripting language which will increase the scope of what developers can do with Bitcoin applications.
Overall, SegWit is a major upgrade that ultimately aims to make Bitcoin more accessible and efficient by allowing for higher transaction throughput at lower costs. With this upgrade, users are able to send, receive and store Bitcoin with greater confidence than before.