What is SegWit?Apr 12, 2023
If you're new to the cryptocurrency world, sometimes it becomes difficult to figure out how things work. This article will give you the full overview of the term SegWit and its impact on the crypto sphere. We ensure that readers with any level of knowledge can begin their journey into the blockchain world. So if you have been wondering just what the fuss was all about SegWit then you have come to the right place!
What is BTC SegWit?
Segregated Witness (SegWit) is a protocol upgrade created to increase the speed and scalability of Bitcoin network developed in 2015 by Bitcoin developer Pieter Wuille. The SegWit upgrade was implemented as a soft fork on the Bitcoin network. Bitcoin SegWit soft fork date was in August 2017.
SegWit’s main idea is to reorganize block data so that signatures are no longer placed along with transaction data. In other words, the Segregated Witness upgrade consists of segregating the signatures from transaction data. This allows more transactions to be stored in a single block, increasing the transaction throughput of the network.
The main purpose is to make transactions more efficient while reducing transaction fees. This is accomplished by separating signature information from transactional data, thereby creating smaller blocks with higher capacity for storage and processing power.
Additionally, Segregated Witness made transactions more secure so that crypto wallets and exchanges are more protected from double-spending attacks. Also, SegWit solved the so-called transaction malleability bug.
As a result, transactions become faster transaction times with less strain placed on network resources. SegWit's lower fees and improved user experience made cryptocurrency attractive for all who begin their crypto journey.
How SegWit works
SegWit, the process of Segregated Witness, is a highly technical protocol used for cryptocurrency transactions. In simple words, SegWit helps to reduce the weight of transactions in a block. It separates certain data or “witness” from a transaction, which reduces the size of the transaction when it is broadcast to the blockchain. This helps to optimize processing time and reduce fees for both users and miners since larger transactions can be processed more quickly.
SegWit is responsible for scaling Bitcoin transactions but is used for many other crypto assets today.
This upgrade helps to make cryptocurrency transactions faster, more secure, and less expensive for all parties involved - a great step forward in the digital money revolution.
Native SegWit (SegWit-bech32)
In short, Native SegWit (also known as bech32) is an updated version of the SegWit. The bech32 format offers increased transaction speed, better error-detection mechanisms, and even lower transaction fees.
Benefits of using SegWit
Segregated Witness (SegWit) is a beneficial protocol upgrade for the Bitcoin codebase that has been slowly gaining traction amongst cryptocurrency users.
What are the main benefits of this upgrade?
- SegWit accelerates transaction validation speed, contributing Bitcoin blockchain to a more efficient network
- SegWit provides lower fees by separating signatures from the data within the transaction validation process, thus allowing more room on each block.
- SegWit adds an extra layer of security by making users less vulnerable to malicious attacks.
Moreover, most wallets and exchanges have added support for SegWit, which means that users can enjoy a more efficient transaction process with more favorable fee rates while making transactions with Bitcoin.
The Bottom Line
It becomes obvious that Segregated Witness (SegWit) is a critical innovation for all Bitcoin users. It provides a better user experience by reducing transaction fees, increasing transaction speeds that make the Bitcoin network more efficient.
As the cryptocurrency world continues to evolve, technologies like SegWit will become ubiquitous in the industry. Don't miss your chance to become a part of the digital revolution! Download Arctic Wallet and become a crypto investor in three steps!