SegWit, short for segregated witness, is a protocol upgrade on the Bitcoin network designed to prevent transaction malleability and increase block capacity. SegWit was first implemented in August 2017 but has been somewhat of a controversial issue within the blockchain space ever since.
Despite controversy and criticisms, SegWit has seen a relatively recent surge in adoption. The percentage of transactions using SegWit began to increase drastically in late 2019, from 40 percent in September to 60 percent in October 2019.
In this article, we’ll look at how SegWit works, discuss the adoption that SegWit has seen, and outline both the positives and negatives it brings to the Bitcoin network. We will also cover the controversy and disagreements surrounding SegWit. Finally, we’ll compare SegWit wallet address formats to those of legacy wallets.
A good way to understand how SegWit works is to compare SegWit blocks to non-SegWit blocks (also known as legacy blocks).
Legacy blocks have a combined block size limit of 1 MB for all data, including outputs, inputs, signatures, and scripts. For both legacy and SegWit blocks, a witness is needed. Also known as a digital signature, a witness is a serialization of all witness…
