Protocol
SegWit
Soft fork activated in August 2017 that separates signatures from the transaction body and increases effective block capacity.
Definition
SegWit (Segregated Witness) is a Bitcoin protocol upgrade activated in August 2017 via BIP 141. It moves signature (witness) data out of the main transaction body, increasing effective block capacity to nearly 4 MB and eliminating a historical form of transaction malleability. SegWit was the technical prerequisite for building the Lightning Network and paved the way for Taproot four years later. Today, virtually all institutional custody addresses use SegWit or Taproot formats.
Related Terms
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