SegWit: The Technical Revolution that Transformed Bitcoin

The Origin of a Necessary Improvement

In 2015, developer Pieter Wuille presented a revolutionary proposal to address critical limitations in the Bitcoin network. This initiative, driven by contributors to Bitcoin Core, would become one of the most significant updates to the protocol. Two years later, in August 2017, it was realized through a soft fork that would permanently change the architecture of Bitcoin transactions.

How Does Data Separation Work?

Segregated Witness (SegWit) implements a fundamental change in how transactions are structured. The innovation lies in separating the “witness” information —which contains digital signatures, public keys, and validation data— from the rest of the transaction data.

In the system prior to SegWit, signature data constituted a substantial percentage of the block, occupying up to two-thirds of the available space. By rearranging these elements into a separate field and not counting them towards the block size limit, SegWit frees up significant capacity to process more transactions.

This separation has a notable mathematical effect: the block limit effectively increases from 1 MB to approximately 4 MB, multiplying the number of transactions that can be processed simultaneously.

Impact on Speed and Efficiency

The practical consequences of this architecture are substantial. By increasing the available space per block, the network can include more transactions, significantly accelerating the TPS (transactions per second) of the Bitcoin system. This increase in throughput represents a direct solution to the congestion problems that the network faced.

Enhanced Security: The Solution to Malleability

Beyond scalability, SegWit addresses a vulnerability known as transaction malleability. Before this update, attackers could modify the identifier of a transaction during its confirmation, compromising the integrity of the network.

By separating signatures from the main data, SegWit completely eliminates this attack surface. This security fix paved the way for innovations in higher layers, such as the development of Layer 2 protocols including Lightning Network.

The Fork and the Community Controversy

The implementation of SegWit was not unanimous. Intense debates arose within the Bitcoin community regarding the technical complexity of the solution and its potential implications. Some questioned whether the architecture exposed new vulnerabilities to the system.

Concerns included theoretical scenarios where certain transactions could be interpreted as “anyone can spend”, representing security risks. This ideological divide was crucial in the creation of Bitcoin Cash, a fork that chose to directly increase the block size without implementing SegWit, representing two opposing visions on the evolution of Bitcoin.

Today, SegWit remains an example of how technical decisions in decentralized protocols generate deep deliberation in their communities.