In August 2017, Bitcoin implemented Segregated Witness (SegWit), a protocol upgrade proposed by Peter Wuille in 2015. SegWit was designed to solve transaction malleability and enhance Bitcoin’s scalability.
SegWit separates witness data from transaction data, allowing more transactions to fit into each block. This change increased Bitcoin’s block size limit and improved its capacity to handle more transactions per second (TPS).
Despite initial resistance, SegWit’s adoption led to lower transaction fees and enabled the development of layer-2 solutions like the Lightning Network. Before SegWit, Bitcoin blocks were limited to about 1,650 transactions; SegWit increased this to roughly 2,700 transactions per block.
SegWit’s long-term importance lies in its ability to improve Bitcoin’s efficiency, security, and scalability, paving the way for future innovations.
