Updated at 1:40pm EST:
Segregated Witness has been merged into Bitcoin Core.
During a Bitcoin Core development meeting on Thursday, it was decided that the code for Segregated Witness (SegWit) is ready to be merged into the master branch. According to Bitcoin Core contributor Eric Lombrozo, the merge is expected to take place in the coming days.
Why This Is a Big Deal
Segregated Witness is an improvement to the Bitcoin protocol that enables a variety of new features and enhancements to the network. Much of the Bitcoin community is excited about this change due to its effective increase to the Bitcoin block size limit to roughly 1.7 megabytes.
In addition to the effective block size limit increase, there are also a multitude of other advantages associated with this protocol change. Segregated Witness fixes the well-known transaction malleability issue, which was infamously blamed by former Mt. Gox CEO Mark Karpeles for the loss of user funds. A fix for this longstanding bug in the Bitcoin protocol is also required for the Lightning Network, perhaps Bitcoin’s most promising scaling solution, to function properly.