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segwit

Segregated Witness, or SegWit, is the name used for an implemented soft fork change in the transaction format of the cryptocurrency Bitcoin which has also been implemented on currencies such as Litecoin, DigiByte and Vertcoin.

The formal title “Segregated Witness (Consensus layer)” had Bitcoin Improvement Proposal number BIP141 The purpose was to solve malleability. It was also intended to mitigate a blockchain size limitation problem that reduces Bitcoin transaction speed.

It does this by splitting the transaction into two segments, removing the unlocking signature (“witness” data) from the original portion and appending it as a separate structure at the end.

The original section would continue to hold the sender and receiver data, and the new “witness” structure would contain scripts and signatures. The original data segment would be counted normally, but the “witness” segment would, in effect, be counted as a quarter of its real size.