The term “Segregated Witness” (SegWit) describes a modification to the Bitcoin transaction format. It was intended as a protocol improvement to protect against transaction flexibility and shorten transaction times by raising block capacity. It was firstly activated on Litecoin (LTC), and secondly on Bitcoin (BTC). Let’s discuss the SegWit and what was the purpose behind this concept!
What is SegWit?
Word SegWit combines two words “Seg” which means segregated and “Wit” which means witness. As it is represented by a name, it is the concept of segregating the witness. Now the question arises what is a witness and why do we need to segregate it? So, the answer is quite simple, the witness always reveals the proof and identity.
If I talk about transaction witnesses, here is the Public key and Digital Signature is the witness of the transaction. The public key is responsible for holding the user’s identity whereas the digital signature is responsible for holding the user’s authenticity. Each transaction in a block has the public key and digital signature and it takes almost 60% to 65% of the storage space of a single transaction. This means it requires a lot of space even more than the actual data and the number of transactions that would be processed.
For instance, a block having a size of 1 MB holds 10 transactions at a time. Each transaction has metadata like sender address, receiver address, crypto amount, public key, and signature. Here a lot of space is occupied by public keys and signatures whereas the actual transactions data required less space to process. So, here a lot of problems arise like more storage, power, and time consumption, to overcome all these given challenges SegWit came into the concept.
SegWit provides the solution: what if we segregate the witness from the actual transaction? The Bitcoin, community decided to send the witness (public key and signature) separately, so that’s why here they can send more transactions in a single block. For instance, if it could transmit 10 transactions before SegWit was deployed, it would be able to send 20 transactions after SegWit is implemented. which ultimately speeds up transactions and has minimal power and network usage.
Advantages
- Increase the number of transactions in a single block
- Low power and network usage
- Increase the speed
Disadvantages
- Not all exchanges and wallets accept Bitcoin SegWit. Therefore, you can only send Bitcoin to someone who uses these sites by using their Bitcoin Legacy address.
Conclusion
Word SegWit combines two words “Seg” which means segregated and “Wit” which means witness. As it is represented by a name, it is the concept of segregating the witness (public key and signature), it always sends the witness separately to increase the number of transactions and speed. Furthermore, it was intended as a protocol improvement to protect against transaction flexibility and shorten transaction times by raising block capacity.
