SegWit, short for Segregated Witness, is a soft-fork update to the Bitcoin blockchain that was activated in August 2017. The main goal of SegWit was to address the scalability issues that were plaguing the Bitcoin network, such as slow transaction times and high fees. It did this by separating the signature data, or “witness” data, from the rest of the transaction data, thus freeing up space on the block and increasing the block size limit.
Before SegWit, all of the data in a Bitcoin transaction, including the signature, was included in the block size limit of 1MB. This limited the number of transactions that could be processed on the network, leading to slow transaction times and high fees. SegWit solves this problem by moving the signature data, or “witness” data, out of the block and into a separate structure called a “witness”. This frees up space on the block, allowing for more transactions to be processed and increasing the effective block size limit.
Additionally, SegWit also improves the security of the Bitcoin network by introducing a new feature called “Script versioning”, which allows for the implementation of new scripting language for smart contract capabilities.
The adoption of SegWit was not without controversy, as the Bitcoin community was divided on whether or not to implement the update. However, it was ultimately activated on the network with the support of a majority of the community and mining pools.
Since its activation, SegWit has been successful in addressing the scalability issues that were plaguing the Bitcoin network. Transactions on the network have become faster and cheaper, and the network has been able to handle a larger number of transactions. This has made Bitcoin more attractive for everyday use, and it has also paved the way for the development of new technologies such as the Lightning Network, which allows for even faster and cheaper transactions on the Bitcoin network.
In conclusion, SegWit is a soft-fork update to the Bitcoin blockchain that was activated in August 2017, aimed at addressing scalability issues such as slow transaction times and high fees. It does this by separating the signature data from the other data historically included in the block.