SegWit (Segregated Witness)

SegWit stands for Segregated Witness – signature data kept separate. The proposal, BIP 141 by Eric Lombrozo, Johnson Lau and Pieter Wuille, has been active since block 481,824, mined on 24 August 2017.^[1],[2],[3] It was introduced as a soft forkGlossarySoft forkA change to the consensus rules that only tightens them. Blocks that follow the new rules remain valid for old nodes – so Bitcoin can be developed further without a chain split, as with SegWit and Taproot.In the glossary →×: older nodes still accept the new blocks as valid.

What SegWit changed

• Malleability fixed: Previously, third parties could alter the signature of an unconfirmed transaction so that its identifier (TXID) changed – amount and recipient stayed the same. Because signature data no longer feeds into the TXID, this is no longer possible for transactions whose inputs are all SegWit. That is an important prerequisite for the Lightning NetworkGlossaryLightning NetworkA second layer on top of Bitcoin for fast, low-cost payments. Amounts move off the blockchain via payment channels; only opening and closing a channel ends up in a block as a normal transaction.On the learning path: Stage 1 · Step 3 – How does Bitcoin work? →In the glossary →×.
• More space per block: Instead of the old 1 MB limit, a block may weigh up to 4 million units. Signature data counts for only a quarter.
• A new unit of size: The virtual size in vbytes is the weight divided by four. Fees in sat/vBGlossarysat/vB (satoshis per virtual byte)Unit for the fee rate of a Bitcoin transaction: how many satoshis you pay per virtual byte of its size. The higher the rate, the sooner miners will include the transaction in a block.In the glossary →× refer to it.^[1]

What this means for you

Native SegWit addresses start with bc1q; the transitional form, ‘nested SegWit’, uses addresses starting with 3. Because signature data counts for less, the same payment usually costs less in fees than with old addresses starting with 1. Many wallets use SegWit or its successor TaprootGlossaryTaprootA soft fork from November 2021 that introduced Schnorr signatures and more flexible spending conditions. Complex arrangements such as multisig can look like a simple payment. Taproot addresses start with bc1p.In the glossary →× (bc1p) by default.