Segregated Witness (Segwit) – a solution that aims to increase network scalability. It will be easier to understand this concept considering the structure of Bitcoin transaction. It consists of two parts:
The witness part was a problem for the blockchain because formally this signature can be changed already after it appeared in the block. This does not mean that BTC will not be transferred. But this complicates all new transactions. Unconfirmed transactions slow down the speed of new transactions, as they “pull” data from a previous transaction.
Therefore, it is difficult to transfer Bitcoin and it is difficult to implement large-scale updates due to the features of the current protocol. Against this, the movement for the introduction of SegWit began.
They started talking about Bitcoin modernization back in 2012.
In August 2014, Maxwell, Adam Back, and Peter Wuille launched Blockstream, a company that investigated blockchain. The developers decided to separate the part of the data from the Basic part of the transaction. They called this feature Segregated Witness.
Segregated Witness should solve the problems of network capacity and adapt the blockchain to new realities. Segwit streamlines the transaction process and creates the conditions for the subsequent increase in block size. Here is a list of “problems” and “tasks” that SegWit should solve:
So SegWit touches on such important aspects for Bitcoin as scalability, level of protection, and interaction with new protocols.
The main contributors to the SegWit idea for all these years have been the developers of the main Bitcoin client Bitcoin Core. Later, they also started working on the new Blockstream startup, which we mentioned above. One of the products of this company is the Lightning Network protocol.
We can say that Segwit is improving Bitcoin ecosystem here and now, as well as create a bridgehead for further development. This, in turn, can seriously affect the course of the world’s most popular cryptocurrency.
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