What is SegWit?

SegWit is Segregated Witness, and it is an update to Bitcoin software.

The update was first aimed at fixing transaction malleability. Although this vulnerability is not the most damaging to the users, it has been taken advantage of before, and needed to be fixed. SegWit notably addresses other factors, and now has been focused on addressing Bitcoin scaling. Bitcoin is clearly facing massive scaling problems with delayed transactions and huge fees, and these things will be its downfall if they are not changed.

SegWit increases the block size limit and allows second-layer solutions. The main issue of scalability comes from too small of a block size. The current blocks are limited to one megabyte, and have trouble keeping up with the enormous amount of transactions currently being done, which results in wait times. SegWit will first quadruple the block size limit to four megabytes, and will also allow second-layer solutions. These solutions would include another major improvement. The Lightning Network, which is another measure to improve speed and lower fees dramatically.

One of the caveats of SegWit is that it only comes into effect when 95% of the network signals support. That means that miners of the currency will nearly unanimously have to support it in order for it to go into effect.