The Segregated Witness (SegWit) upgrade, implemented in Bitcoin in 2017, revolutionized the structure of transaction data. This upgrade primarily addressed transaction malleability while also increasing block capacity. Below, we break down the key changes, benefits, and activation process of SegWit.
Key Changes Introduced by SegWit
Legacy vs. SegWit Transactions
Legacy Transactions
- Structure: Unlocking code (signatures) is embedded alongside each input.
- TXID Creation: Generated from the entire transaction data, including signatures.
SegWit Transactions
- Structure: Unlocking code is moved to a separate witness field at the end of the transaction.
- TXID Creation: Derived from transaction data excluding unlocking code, making TXIDs immutable.
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Benefits of SegWit
1. Fixes Transaction Malleability
- Issue: Altering signatures in legacy transactions changed the TXID, causing inconsistencies.
- Solution: SegWit removes signatures from TXID calculation, ensuring reliable transaction identifiers.
2. Increased Block Capacity
- Old Limit: 1 MB per block (measured in bytes).
New Metric: Weight units (4M weight units per block).
- Normal data: 4 weight units per byte.
- Witness data: 1 weight unit per byte (75% discount).
- Result: Effective block size increased to ~1.8 MB for typical transactions.
Was SegWit a Block Size Increase?
- Yes, but indirectly. The shift to weight units allowed blocks to exceed 1 MB without a hard limit increase.
- Typical Block Size: ~1.8 MB (60% witness data discount).
Why This Approach?
- Soft Fork Compatibility: SegWit’s design ensured backward compatibility, avoiding a network split.
- No Mandatory Upgrades: Older nodes could still validate blocks (without witness data).
Activation Timeline
- Threshold: 95% miner signaling within a 2-week period.
- Activation Date: August 24, 2017 (Block 481,824).
- Timeout: November 15, 2017 (proposal would expire if unmet).
FAQs
1. What is transaction malleability?
- Answer: The ability to alter a transaction’s TXID by modifying its signatures, causing inconsistencies.
2. How does SegWit increase block capacity?
- Answer: By discounting witness data (1 weight unit/byte vs. 4 for normal data), allowing more transactions per block.
3. Was SegWit a hard fork?
- Answer: No, it was a soft fork—older nodes still accepted SegWit blocks.
4. How do I upgrade to SegWit?
- Answer: Use Bitcoin Core v0.13.1+ or any modern SegWit-enabled wallet.
5. What happens if I don’t upgrade?
- Answer: Your node receives "lightweight" transactions (witness data stripped).
6. Why did miners decide SegWit’s activation?
- Answer: Miner consensus ensured network stability during the upgrade.
Conclusion
SegWit’s innovative restructuring of transaction data resolved critical issues like malleability while boosting scalability. Its soft-fork design ensured smooth adoption, cementing its place as a cornerstone of Bitcoin’s evolution.
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Keywords:
- Segregated Witness (SegWit)
- Transaction malleability
- Block size increase
- Bitcoin upgrade
- Soft fork
- Witness data
- TXID
- Weight units
Further reading: BIP 141, Bitcoin Core Docs
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