SegWit

SegWit, short for Segregated Witness, is a protocol upgrade implemented on the Bitcoin network. It separates a transaction into two segments: the transaction data (including sender and receiver information), and the witness data (which includes the signatures).

The main benefits of SegWit include:

• Mitigation of transaction malleability: By separating the witness data, the transaction ID becomes immune to changes in the signature data.

• Increased block capacity: By treating witness data differently, more transactions can fit into a block, effectively increasing the network's capacity.

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  "SegWit mitigates transaction malleability by making the transaction ID immune to changes in the signature data. It also increases block capacity by allowing more transactions to fit into a block."

SegWit was activated on the Bitcoin network in August 2017 via a soft fork. This means it was backward compatible with nodes that did not upgrade to the new protocol.

The implementation of SegWit paved the way for second-layer solutions like the Lightning Network, which rely on the mitigation of transaction malleability to function effectively.