What is Segregated Witness (SegWit)? =

You’ve probably seen the term ‘SegWit’ pass by. Segwit stands for Segregated Witness, and is a term you often hear when talking about blockchain. For example, Bitcoin also uses a SegWit. Do you already know what a Segregated Witness (SegWit) is ? To understand what a SegWit is, we need to delve a little deeper into blockchain technology.

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  • What is a SegWit?
    • Who Uses SegWit?
  • The advantages of SegWit
    • Capacity increase
    • Transaction speed increases
    • Lower transaction costs
    • Fixing bugs
  • How does SegWit work?
  • Conclusion

What is a SegWit?

In 2015, SegWit Pieter Wuille invented a protocol called Segregated Witness (SegWit) that should support the scalability of blockchain. There has always been a problem when it comes to the scalability of blockchain. Just think of the Bitcoin network.

Every 10 minutes a new block is validated by the Bitcoin network. Such a block contains numerous transactions. The number of transactions in the block also determines how quickly a block can be validated. At the moment, Bitcoin’s blockchain can process about 7 transactions per second.

SegWit ensures that the structure of the data in the blocks is changed, so that the blocks are smaller. SegWit does this by no longer putting the signatures next to the transaction data. The name actually says what a SegWit does; it segregates (separate) the signatures from the transaction data.

Now where does that lead? Well, because less data is linked to a transaction, there is room for more transactions. In this way, many more transactions can be processed in a block, which increases the number of transactions per second.


Who Uses SegWit?

There are several blockchains that use SegWit. This is due to the many advantages that SegWit has. For example, Bitcoin and Litecoin both use SegWit. Bitcoin has only been using SegWit since 2017. Bitcoin developers have used a soft fork to add SegWit to the Bitcoin platform.

A soft fork means that a copy of the blockchain is temporarily made to process a new feature. After this, the copy (with the new feature) will be used as the main blockchain, and the old version will expire.

It is also possible that not everyone will switch to the new version of the blockchain. In that case we speak of a hard fork .


The advantages of SegWit

Now that you know about SegWit, you may wonder what advantages this technique brings. And rightly so, because why would Bitcoin use SegWit? Bitcoin has good reasons for that!

Capacity increase

SegWit has doubled the capacity of the BitCoin network(!). By separating the digital signature from the transaction, more transactions can be processed in a block. A block consists of almost 60% of the digital signature. So there is a lot to be gained here.

Transaction speed increases

Because more transactions can be processed in a block, a transaction is also processed a lot faster. Suppose a block where SegWit is not yet used is full, all subsequent transactions are placed in a mempool. This is a kind of queue. As a result, you may have to wait a while before your transaction is processed in one of the blocks.

SegWit allows more transactions to be processed in a block, reducing the chance that your transaction will end up in a mempool.

Lower transaction costs

Because the transaction speed has increased, the costs of a transaction are now a lot lower. Before SegWit, you sometimes had to pay $30 for a transaction. With SegWit, that amount has been reduced to about $1 per transaction.

Fixing bugs

Before SegWit existed, it sometimes happened that something went wrong with a transaction, as a result of which it was declared corrupt. Because SegWit separates the digital signature from the transaction, these problems no longer occur.

How does SegWit work?

A SegWit therefore ensures that the transactions in the blocks are reduced, so that more transactions can be processed in a block. But how does a SegWit do that?

About 60% of the space in a block is used by digital signatures. Usually these digital signatures are in the middle of the transaction data. A SegWit does not remove the digital signatures, it just moves them to the end of the transaction. This reduces the size of a block considerably, so that more transactions fit in a block.

Before SegWit, there was a maximum of 1,000,000 bytes (1MB) of data in a Bitcoin block. When the limit was reached, no more transactions could be added to the block. These transactions then ended up on a queue (mempool), and could then only be processed in the next block.

SegWit measures the size of a block in a completely different way. It looks at the weight of a block. As a result, the weight of a block that does not use SegWit is 4 times heavier. SegWit performs a mathematical trick here, so that nodes that validate a SegWit block can also process blocks of 4MB. However, a node that validates blocks with the original protocol can only validate blocks of 1MB.

Yet a 4MB block is never validated. That is very big. In most cases, a SegWit block is no larger than 2MB.


So now you know what a Segregated Witness (SegWit) is. A SegWit ensures that there is more space left in a block, which ultimately allows more transactions to be processed. SegWit does this by placing the digital signature at the end of the transaction. Several blockchains use SegWit. The most famous blockchains are Bitcoin and Litecoin.

For years, various problems have been encountered with well-known blockchains. One of the biggest problems is that many blockchains are not scalable enough. SegWit is a technique that aims to solve this problem. So that is a step in the right direction.



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