A Detailed Analysis of Segregated Witness or SegWit and Its Benefits

Developed in 2015, Segregated Witness or SegWit is a protocol upgrade designed to cater to the critical scalability problems, which have been hovering over the blockchain networks ever since their inception. Later in August 2017, the SegWit upgrade was launched as a soft fork in the Bitcoin ecosystem.

Interestingly, on an average basis, the Bitcoin network validates a new block containing several transactions every 10 minutes. The number of transactions that can be validated in each block directly depends upon the size of the block. At present, the Bitcoin blockchain processes around seven transactions per second.

The primary aim of the SegWit upgrade is to restructure block data in such a manner that witnesses (signatures) do not get placed in line with transaction data. The solution segregates the signatures from transaction data, which eventually enhances the storage space of a particular single block along with an increase in the transaction throughput of the entire blockchain system.

Currently, SegWit is an integral part of an array of several cryptocurrency projects, including Bitcoin and Litecoin. Improved transaction speed and increased block capacity are some of the lucrative features that were infused into the system with the introduction of the SegWit upgrade.

Why Choose SegWit?

SegWit bestows upon a complete suite of unprecedented benefits into the blockchain network, which strengthens the operation channels in a big way. The significant benefits offered by SegWit include:

  1. Capacity build-up

As SegWit segregates the signature data from the transaction input, it gives a boost to the storage capacity of the block on an individual basis. Normally, a system without SegWit takes up to 65% of a block space, but SegWit helps to increase the block size from 1MB to nearly 4MB. It is important to take notice that SegWit doesn’t increase the existing block size, but serves as an engineering solution that increases the effective block size without an increase in the block size limit.

Also, SegWit propounded the concept of block weight, which includes transaction data as well as signature data, which is not included in the input field.

  1. Triggers Transaction Speed

The transaction speed gets a boost when lubricated via the SegWit upgrade as more and more transactions move through the blockchain, whose storage capacity gets increased because of the protocol in the first place. Though, the time taken by a block for mining might remain the same, the TPS rate witnesses a surge. This has caused a major slash in the transaction costs, which have settled to $1 per transaction from $30 per transaction after the SegWit introduction.

  1. Transaction Malleability Solution

Tampering of transaction signatures has long been a major concern over the Bitcoin network. This allows corrupted parties to initiate a transaction and as blockchains support immutability of transactions, invalid trades get infused on the blockchain permanently. However, SegWit solves this problem at convenience as the signatures are no longer a part of the input data and so are away from getting altered. Second-layer protocols and smart contracts are the upgraded versions designed to solve such issues.


Having collected ample knowledge about SegWit, we are now in a position to say that the protocol was created to solve scalability issues of the Bitcoin network and other reputed decentralized ecosystems. When combined with the latest technological developments, SegWit promises to offer large data handling at negligible costs.

Though SegWit comes packed with lucrative features, its mass adoption is yet awaited and we will have to wait for a longer time to see it evolve as a powerful tool in the blockchain niche.

David Cox

David is a finance graduate and crypto enthusiast. He projects his expertise in subjects like crypto and Blockchain while writing for CryptoNewsZ. Being from Finance background, he efficiently writes Price Analysis. Apart from writing, he actively nurtures hobbies like sports and movies.

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