Bitcoin core developer Pieter Wuille recently completed a long-awaited upgrade to the bitcoin protocol. Segregated Witness, or ‘SegWit’ for short has now been published, and miners will soon be able to upgrade their software to include it.
Having become an overnight sensation during the Hong Kong Scaling Bitcoin conference, in December of last year, SegWit redesigns the core process of the bitcoin protocol itself, making it more efficient.
The protocol change, which has also been referred to as ‘Separated Signatures,’ removes the part of each bitcoin transaction that carries the digital signature, putting them alongside the blockchain instead.
By decreasing a transaction’s size, more transactions fit inside each block, increasing the number of transactions that the Bitcoin network can process per second. This significantly alleviates, but doesn’t fully solve, the biggest problem with Bitcoin’s ability to scale.
The separate signature files can eventually be discarded, to save hard drive storage space, as they are only useful in block verification. The older the block, the less likely the need to verify it again for any reason.
As a bonus, SegWit automatically solves transaction malleability, a small weakness in the bitcoin core code where a