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Segregated Witness (SegWit): How Does it Enhance Bitcoin’s Transaction Efficiency?

One of the most amazing things about the blockchain is how scalable it is. Upgrades are so common that any qualified person can develop something to improve the existing framework. This is the case with SegWit, the short form for Segregated Witness, which Pieter Wuille, a Bitcoin developer, brilliantly proposed in 2015. In 2017, it was introduced to help increase the Bitcoin network’s capacity by rearranging the way transaction data is stored in a block.

In this article, we will look at how SegWit works, how it enhances bitcoin’s transaction efficiency and the benefits that come with it. 

How does SegWit work?

Before SegWit, every block in a Bitcoin protocol contained 1MB of data. This data included transaction information, digital signatures, and other data. At the end of the day, only about 1,650 transactions could be done in a block. This was a limitation of the Bitcoin protocol. 

When SegWit was introduced, it came with block weight, which helped limit the protocol. It allowed blocks to manage around 2,700 transactions. This block weight separates the digital signature data from the transaction data, leaving more space in each block and allowing more transactions.

How does SegWit enhance Bitcoin’s transaction efficiency?

How SegWit works

Initially, Bitcoin transactions included both transaction data and witness data structure in the same structure. Transaction data usually includes the date, time, time zones, and currencies, while witness data includes information needed to unlock the transferred bitcoin.

SegWit separates the witness from the transaction block(the initial block we talked about in the previous paragraphs), reducing the transaction size and increasing the block’s capacity to hold more transactions.

Benefits of SegWit

1. Improved transaction security

SegWit succeeded in making transaction manipulation a thing of the past; fraudulent activities like double-spending can no longer occur.

2. Improved transaction capacity: 

Separating the witness data and transaction data has resulted in a drastic reduction in transaction size. Naturally, this has increased block capacity and allowed the Bitcoin Network to process more transactions.

3. Lower fees: 

When the transaction capacity is increased, the competition is less among transactions, which reduces transaction fees

4. Backwards compatibility with existing software: 

Users don’t have to get a SegWit-compatible version to use their wallets and other applications because it is compatible with the already-existing Bitcoin software. Thanks to this smooth switch to the new technology, there is no inconvenience. 

Frequently Asked Questions (FAQs) About Segregated Witness (SegWit)

What are some criticisms of SegWit? 

SegWit has been criticised due to the limitations some wallets might have. Not every wallet is compatible with this protocol. Therefore, people have been advised to check their wallet’s compatibility before processing any transactions.

Is SegWit a total solution for Bitcoin’s scalability?

No, SegWit is not the total solution to Bitcoin’s scalability issues. Although SegWit has dramatically helped with the smooth running of the Bitcoin network, it has not erased all its issues. We need to explore more solutions and upgrades to continue to advance the Bitcoin network and improve its scalability.

What is the major significance of SegWit?

Of the many great things that came with the SegWit upgrade, the major ones are the immense increase in Bitcoin network security and transaction efficiency.

Is SegWit safe?

Yes, SegWit is a safe upgrade. In fact, it even addresses a specific security fault called transaction malleability.

Is SegWit the future of Bitcoin? 

SegWit has set the tone for significant improvement in the Bitcoin network, but it is not the ultimate upgrade. While we’ve seen improvements in scalability and security, there’s hope for future upgrades like sidechains, Schnorr signatures, and the Lightning Network have in store for us.



SegWit is an upgrade that has improved Bitcoin’s security and efficiency. It improved transaction security, transaction capacity, lower fees, and backward compatibility with existing software. SegWit is also a foundation for further improvements in Bitcoin, and as it continues to evolve, It remains a big factor in the ecosystem. 

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