SegWit is a shortened version of Segregated Witness, which we can call like “reserved witness”. It was laid out by the Bitcoin Core’s developer team.
SegWit, the soft fork event that we can call partial bifurcation, is a forward-looking bitcoin blockchain upgrade that can work without causing problems, without needing all users to update their software. It was posted on version 0.13.1 of the Bitcoin Core.
SegWit Functioning
In money transactions, there are three main factors. These three factors, which consist of the sender, recipient, and signatures (commonly referred to as “witnesses”), constitute a large part of the process’s breadth. Contrary to what most people think, SegWit does not transfer testimony data into a separate testimony block. Instead, SegWit has a 1 MB block size capacity, counting serialized testimony data as a single unit and core block data as four units; making it capable of carrying 4 million units of blocks. This means that the block sizes are increased.
SegWit counts each byte in the witness as 0.25 bytes until it is 1 MB, meaning the maximum size of a block is almost 4 MB. This does not mean that the data is being downsized. What is done in this process is to count the data in a way that allows to increase the limit of 1 MB. However, this only affects testimony data, and non-testimony data is still counted as 1 byte up to 1MB of maximum capacity, or as 4 units until it reaches 4MB of maximum block volume.
Bitcoin Core: ‘when SegWit processes started to be made with the feature, this change will increase the amount of data per block (the process is 100% Made With Segwit if 2 MB of data per block is expected to fall, but in the worst case, the rate can be up to 4 MB per block). As this allows for more transaction volume, UTXO can be expected to increase its database more quickly (if 100% of transactions are done with SegWit, the rate of this increase can be doubled; in the worst case, because SegWit is a soft fork (partial bifurcation), the uxto [unspent process output] ratio does not change).
Other Benefits
The most obvious benefit of SegWit is the increase in capacity, which takes place in a different trading format. Of course there are other benefits. A few of them:
Enhanced security for multi-signature transactions
Linear scaling of signature hash operations
Script versioning and more.
The most important of these is solving validity issues in transactions. The reason for transaction validity problems is that the signatures, which ensure that the information in the transaction cannot be changed, cannot protect themselves. In other words, the way the transaction ID is calculated gives everyone the opportunity to change the identity of that transaction.
SegWit solves this problem as follows: it removes signatures from the process’ identity data so that it is still impossible for anyone to change the signature data.
Resolving the transaction validity issue also paves the way for payment channels such as Lightning newtork([LN]: blockchain-based instant payment system). Such payment channels can also be applied in Bitcoin, but they are risky because transactions can be changed (due to the validity issue mentioned above). This problem causes the processes to become stuck.
The solution of problems such as increased multi-signature transactions and larger block volume limit is also useful for channels such as LN.
That’s why miners don’t like SegWit. Because what works for different pay channels like this doesn’t work for miners. Because different payment channels are not connected to Bitcoin, transaction fees around here do not go to miners.
Segwit Activation
In order for SegWit to be activated, 95% of miners must approve it. Miners cast their votes by placing certain data in the blocks. The reason that the required ratio is 95% is because of a softfork activation method called” BIP 34″, which stipulates a 95% ratio. Although this is not necessary, it reduces the risk of bifurcations or Double Spend after SegWit activation.
