What does SegWit in Bitcoin refer to ?

[apoorvlathey]

I found that the new version of bitcoin core now supports SegWit. I read an article on coindesk about it. It refers to Segregated Witness, but does it really do ? What are its advantages to a bitcoin user like us ? What are the other updates in the bitcoin software ?

[achow101]

Read https://bitcoincore.org/en/2016/01/26/segwit-benefits/

Basically segwit specifies new output types which require that the signatures (witnesses) when spending from those output types are put into a new structure in the transaction (segregated). This new structure is not part of the data that is hashed for the txid so it removes transaction malleability.

[ebliever]

It also provides a significant bump (maybe 75-80% from what I've seen) in transaction volume capacity for bitcoin, since it reduces the amount of data (per transaction) that needs to fit into each block.

[Kprawn]

It also pave the way for the Lightning Network, which will solve scalability issues that has been hotly debated all these years. If Bitcoin is going

to go meantream, it needs some "upgrade" to the code that would not compromise the security. These "upgrades" are done, without having to

make major adjustments to the block sizes, which would have opened Bitcoin to attacks. 

[th3nolo]

You can have more transactions in one block but with soft-fork, with that is like the block have size of 4mb without need hard-fork. That's something good because bitcoin  can deal with more transaction every second  .

[franky1]

You can have more transactions in one block but with soft-fork, with that is like the block have size of 4mb without need hard-fork. That's something good because bitcoin  can deal with more transaction every second  .

actually for onchain transactions its an average of 1.8x growth..
emphasis IF everyone moves their funds from legacy(traditional/old) privkeys to segwit compliment seed addresses and everyone uses segwit.

the ratio for bitcoin right now is about ~2500tx:1mb..
segwit WILL NOT attain 10,000tx:4mb total weight. it will always be limited to at the very very best 5000tx:2mb... estimates are more likely 4500tx:1.8mb

the other spare 2mb weight are for other addon features later(core hopes) such as confidential payment codes. which dont increase capacity but ned to add more data to a transaction to hide the value for extra privacy.

5000tx:2mb
5000tx+privacy:4mb

to get more capacity ONCHAIN can only be done by either raising the baseblock (1mb base 4mb weight) to 2mb base 4mb weight. to allow 10,000:4mb. but then that 'space' cannot then be used for other features that require the space. and it requires a consensus to make that happen which core are stalling/opposing valiantly/defiantly(depending which side of the fence you sit)  because they want other features offchain, rather than staying above bitcoins capacity growth onchain.

its like offering a coat to get a female comfortable on a rainy night, hoping it would sway her to take off her pants later

[Carlton Banks]

It also provides a significant bump (maybe 75-80%

with that is like the block have size of 4mb

Ok, to clear this discrepancy up:

1.8MB is how big the overall segwit blocks could get, but that's when you run today's transaction burden through it.
4MB really means 1MB for transaction data, and 3MB for the signatures for those same transactions.


So, that means today's transactions use tx:sig ratio of 1:0.8 (5:4, in whole numbers). The segwit block structure encourages that to change to 1:3. In order to get the average ratio of transactions to signatures closer to 1:3, a much bigger average bytesize for the signature part is needed. But there's no point in doing that for the sake of it, only if it jams more transactions in per block.

Only Lightning transactions use transactions that are signature-heavy enough to make use of the 2.2 MB that 5:4 cannot make use of. So you can think of that additional capacity as almost like "Lightning only", or whatever other sig-heavy 2nd layer system can use it. And the ratio will likely have to change to reflect whatever works best in practice, but let's get this change behind us first, lol.