If one proposal excited attendees at the recent Scaling Bitcoin workshop in Hong Kong, Bitcoin Core and Blockstream, it was developer Dr. Pieter Wuille’s Segregated Witness. Praised by many within the technical community, Segregated Witness is expected to improve Bitcoin’s performance in a number of ways, while some even hope it might be the scaling solution that helps bring some peace back to the Bitcoin community.
In this first part of Bitcoin Magazine’s three-part series on Segregated Witness: how it works.
What are Bitcoin transactions again?
In order to understand Segregated Witness, it is helpful to understand what Bitcoin transactions are on a more technical level. (Feel free to skip to the last section of this article if this is a familiar subject.)
For starters, it’s important to realize that the Bitcoin protocol, at its core, consists of transactions. Nodes on the peer-to-peer network don’t send each other bitcoin; they send each other packages that contain transaction data.
These Bitcoin transactions, in a way, are really sets of “locks.” More specifically, each transaction contains two main components. One half effectively unlocks bitcoin that were locked up in previous transactions, using