Definition SegWit (Segregated witness)’
SegWit is the process by which the limiting block size in the blockchain increases on deleting data signature from Bitcoin transactions. When certain parts of the transaction are removed, it frees the space or the capacity to add several transactions in the chain.
To allocate funds to the individual, and the witnesses of the transaction signature. Consequently, Segregated witnesses, in short, means to separate the signatures of the transaction.
The concept was formulated SegWit Wuille bitcoin developer Peter.
Breaking down the ‘SegWit (Segregated witness)’
Bitcoin blockchain consists of several systems distributed through peer-to-peer network. These systems are called nodes, and serve as administrators of bitcoin transactions. All transactions in bitcoin are duplicated across the nodes, making it virtually impossible to crack and damage the wires.
The transaction data that is shared between multiple nodes consists of two components – inputs and outputs. There may be one or more of the inputs and outputs involved in transactions. Access to the public address of the recipient. The input is the public address of the sender. The sender has a public address of the recipient to send money to him or her. The majority of the space in the transaction consists of a signature part of the input signal, which confirms that the sender has the necessary funds to make a payment. So in essence, Bitcoin is transferred from inputs to outputs for each transaction transmitted. Once all the nodes have verified the transaction is valid, the transaction will be included in the block, which is added to the chain, or Ledger to the General public.
The problem is that the Bitcoin platform is that how to conduct more and more transactions, more units must be added to the chain. Blocks are generated every 10 minutes and is not restricted to a maximum size of 1 megabyte (MB). Because of this limitation, only a certain number of transactions can be added to the unit. The weight of the operations represented by blocks, weighing over a network and causes delays in processing and verifying transactions, in some cases, taking hours to confirm the transaction is valid. Imagine that all Bitcoin transactions that have been conducted since the advent of Bitcoin in 2009, sitting on the blockchain and still piling up. Long term, the system will not be stable unless radical changes are made.
Dr. Peter Wuille talks about how to solve this problem, the digital signature must be separated from these transactions. This process is known as segregated witness or SegWit. A digital signature is 65% of the space in this transaction. SegWit attempts to ignore data added to the signature removing signature in the input and moving the structure closer to the end of the transaction. This will lead to an increase in the size of 1 MB as the block size to nearly 4 MB. In addition to slightly increasing the Size of the capacity blocks SegWit also solves the problem where the receiver can catch the identity of the sender of the transaction in the quest to get more coins from the sender. Since a digital signature is disconnected from the input, the defaulting party will have no way to change the ID of the transaction without invalidating digital signature.