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How much do you know about SegWit?

SegWit is an update to the Bitcoin protocol based on the term segregated witness consensus layer. This entity is a technology capability for transaction optimization that was launched in 2015.

  1. SegWit is a significant modification of the Bitcoin protocol.
  2. With Bitcoin scalability reaching its peak in 2017, SegWit was launched as a soft fork on the Bitcoin network.
  3. SegWit’s main competitor is currently Bitcoin Cash, which is a type of hard fork of Bitcoin.
  4. SegWit is currently a scale optimization method that runs on countless digital currencies such as LiteCoin.

You can also read: What is a nonce? (All you need to know)

Bitcoin Scalability issue

The bitcoin blockchain network needed a complete scalability increase with expanding users and nodes in it and the blocks. Bitcoin also had its own set of ceilings that prevented transactions from reaching a certain level. Developers have always been looking for a way to dynamically manage the sharp increase in future transactions to solve scalability in the blockchain.

In 2017, developers came up with a unique way to increase the scalability of bitcoins. This method, which was a kind of soft fork, was called SegWit. Soft forks are changes in the blockchain network during which protocols and standards change. Accordingly, in 2017, this soft fork created a kind of gap in the Bitcoin blockchain network.


The primary purpose of launching SegWit is to optimize the speed and performance of transactions in the blockchain. Note, however, that the first digital currency to use SegWit was LiteCoin instead of Bitcoin.

SegWit can reduce the volume of transactions in a block by breaking and splitting it into two parts. This method completely halved the number of transactions in a block.

Each transaction consists of two parts. The first part is the e-wallet address of the sender and the recipient, and the second part contains the witness data in which the transaction signatures place. With the introduction of SegWit, the second part of the transaction, which was Witness data, was deleted. In this case, the transaction required less space to be in the block and reduced the volume of the block to half the previous size.

In addition, SegWit provides a way for users to change transaction hashes in the blockchain. Changing even one character in a digital signature can change the entire hash of a transaction. In SegWit, it is impossible to change the transaction ID due of the signature removes from the transaction, and the witness data is deleted. However, this method makes the transaction more flexible.

Advantages of SegWit

The most significant advantage of SegWit is that it significantly reduces the number of blocks in the blockchain and speeds up the network. SegWit is a feature that most bitcoin-based services currently use. Even at Google, you can quickly tell if a transaction supports SegWit.

SegWit is the first and fastest solution to the Bitcoin scalability debate. However, this method was first implemented on Light Coin and then reached the Bitcoin blockchain. In any case, both directly and indirectly, the blockchain speed increased dramatically with the addition of SegWit, and the block volume decreased.

downsides of SegWit

Although SegWit-based transactions have increased by more than 65%, the bitcoin blockchain and its transactions are still slower than other altcoins. One of the reasons is that not all users in the world use SegWit transactions. So there is still a long way to go before SegWit can completely solve the scalability problem in the Bitcoin blockchain.

In previous years, developers created both hard forks and soft forks for a definite reason, and that was the issue of scalability. One of the most significant hard forks that we mentioned in this article was Bitcoin Cash, launched on August 1, 2017. With such a fork, the size limit of each block was increased from 1 MB to 8 MB.


You have to see whether the new generation of blockchains can succeed or bitcoin hard forks will take advantage. In this case, there is fierce competition to create new digital currencies based on smart contracts that have both better performance speed and lower transaction volume. But Bitcoin is still the most widely used and most influential digital currency in the world.

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