Was the Segwit introduction really necessary

Any one here who can explain the Segwit upgrade in a simplified way? I can’t seem to understand the upgrade done apart from the structure changes in transaction data and to also fix transaction malleability and I think the increase on the block size. was there any other upgrade? Can someone explain the upgrade better but in a simplified context.

Quote from: Livingleged on December 27, 2025, 10:17:00 AM

I hope you know about transaction structure to make your understanding easy!

There was two upgrade of Segwit. The first one is Segwit version 0, which is the Segwit that introduced structure changed in the transaction and also fixed transaction malleability while Segwit version 1 introduced Taproot, this introduced a way to make signatures smaller with Schnorr signature to reduced number of signatures and the size in transaction, a new type of script called tapscript and also improved privacy in transaction.

Before the Segwit upgrade, legacy transactions(p2pkh and p2sh) are heavy in bytes and the fees are calculated with sat/byte, paying sats for each byte is expensive but the introduction of Segwit v0 introduced a discount weight unit with the witness field and that made the new fee rate as sat/vbyte and also increased the block size.

The legacy transactions do inlcude signature in the scriptsig, but with Segwit, the signature is removed from the scriptsig to the witness field. So when transactions byte are calculated, the signature is calculated on the discount of witness, you are paying less fee as compared to legacy transactions where signature is included in the scriptsig..

There are couple of threads in the forum about Segwit but the images are broken. Learnmeabitcoin gives summary and basic.
https://learnmeabitcoin.com/technical/upgrades/segregated-witness/

The simplified explanation is that Segwit was the solution to transaction malleability, as already mentioned above, in the learnmeabitcoin website. The idea is to segregate the signature from the transaction, so that the TXID is not determined by the signature. A beneficial side effect of this segregation is that, because signatures are no longer part of transactions, a block can now contain more transactions than before.

This is pretty much it. It got consensus because it also slightly increased the block size at a time when people really demanded it.

Quote from: Livingleged on December 27, 2025, 10:17:00 AM

Any one here who can explain the Segwit upgrade in a simplified way?

BIP-141 has enough "simplified" information regarding that.
If you disregard the references and examples, the rest or at least the "Motivation" part should be easy enough to understand and contains the answers that you seek.

Link: github.com/bitcoin/bips/blob/master/bip-0141.mediawiki
Most notably in point 3's "New script system could be introduced" paved a way for future upgrades without changing the consensus rules.

Quote from: BlackHatCoiner on December 27, 2025, 09:14:55 PM

A beneficial side effect of this segregation is that, because signatures are no longer part of transactions, a block can now contain more transactions than before.

Be careful with your wording. IIRC only legacy node and wallet wouldn't see signature on segwit TX. Signature itself is part of TX, but it's counted as witness data, where witness data benefit from witness discount.

Quote from: BlackHatCoiner on December 27, 2025, 09:14:55 PM

because signatures are no longer part of transactions, a block can now contain more transactions than before.

This is pretty much it. It got consensus because it also slightly increased the block size at a time when people really demanded it.

This is pretty much why it was really necessary.

As there are basically no downsides, and it allows transactions to be made cheaper and also fitting more transactions in a block, it greatly increases scalability.

Most scalability solutions costs decentralization, which isn`t the case for segwit.

There was no reason not to implement segwit, and many good reasons to.