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What is SegWit?
SegWit (Segregated Witness) is a Bitcoin upgrade that moves signature data, called the witness, into a separate part of each transaction. It fixed a flaw that let a transaction's ID be altered before confirmation, and it counts signature bytes at a discount, so SegWit transactions can cost less in fees.
What it means for you
Bitcoin fees are quoted in sats per virtual byte, a unit SegWit introduced, so the size your wallet charges for can be smaller than the raw byte count, especially when spending from SegWit addresses. Because a transaction's ID no longer changes when signatures are altered, wallets and payment channels can rely on unconfirmed transaction IDs staying put.
How it works
BIP-141 adds a witness structure committed to blocks separately from the transaction Merkle tree. Signatures are no longer part of the transaction ID (txid), so changing how a transaction was signed no longer changes its ID, which made chains of unconfirmed transactions, such as payment channels, workable. Blocks are limited to 4,000,000 weight units, where weight is base size times 3 plus total size, and a transaction's virtual size is its weight divided by 4. Old nodes do not see the witness and treat witness outputs as anyone-can-spend, so they keep working: that is what made SegWit a soft fork.
Source: BIP-141: Segregated Witness (Consensus layer) · checked 4 October 2026
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