$ 59,851
$ 2,197.2
$ 0.9990


SegWit, short for “Segregated Witness,” is a protocol upgrade proposal introduced as a solution to the Bitcoin scalability problem. It aims to increase the block size limit by removing the signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain.

Key Points:

  1. Transaction Malleability Fix: One of the primary motivations behind the introduction of SegWit was to fix a bug called transaction malleability. This bug allowed potential attackers to change the transaction ID before the transaction was confirmed, which could interfere with the operation of certain smart contracts and other advanced features.
  2. Increased Block Capacity: By segregating the witness information (signatures) from the transaction data, more transactions can fit into a block. This effectively increases the block size without having to change the size of the block itself.
  3. Backward Compatibility: SegWit is implemented as a soft fork on the Bitcoin network, meaning it’s backward compatible. Non-SegWit nodes can still validate and recognize SegWit transactions; they just see them as anyone-can-spend transactions.
  4. Lightning Network: The implementation of SegWit paved the way for the Lightning Network, a Layer 2 scaling solution for Bitcoin. The Lightning Network allows for faster and cheaper transactions by creating off-chain payment channels.
  5. Reduced Fees: With SegWit, transaction sizes are reduced, leading to lower fees for users.
  6. Wider Implementation: While initially proposed for Bitcoin, SegWit has been adopted by other cryptocurrencies to achieve similar benefits.

How It Works:

  • Traditional Bitcoin transactions consist of inputs and outputs. The inputs contain the sender’s information, including the digital signature (witness data), while the outputs contain the receiver’s information.
  • SegWit updates this by segregating the witness data from the transaction data. The main transaction data still gets stored in the blockchain, but the witness data is stored separately, in an extended block.
  • This segregation means that when calculating the size of a transaction, the witness data is discounted, allowing for more transactions to fit within the 1MB block size limit.


  • Bitcoin Cash Fork: Not everyone in the Bitcoin community agreed with the implementation of SegWit. Those opposing it were in favor of a simple block size increase. This disagreement led to a hard fork in August 2017, resulting in the creation of Bitcoin Cash (BCH), which increased the block size without implementing SegWit.
  • Adoption Rate: While SegWit offers many benefits, its adoption rate took time, as businesses, wallets, and exchanges had to update their software to support it.
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CryptoCurrencyUSDChange 1hChange 24hChange 7d
Bitcoin59,851 3.37 % 2.72 % 14.81 %
Ethereum2,197.2 0.23 % 0.67 % 2.46 %
USDC1.000 0.10 % 0.02 % 0.08 %
Cardano0.2543 0.15 % 1.68 % 3.38 %
Tether0.9990 0.10 % 0.04 % 0.02 %
Binance Coin (Wormhole)222.47 0.38 % 4.71 % 3.08 %