SegWit

SegWit (“Segregated Witness”) is a blockchain protocol upgrade and scalability approach, implemented in Bitcoin and Litecoin in 2017, that increases transaction capacity by storing transaction signature information outside of the base block. While SegWit did not change the base block size, it reduced the amount of space that each transaction requires, thus allowing more to be included per block. To store the additional transaction signature information, SegWit implements a separate 4mb block weight cap. In addition to the direct scalability benefits, SegWit also altered transaction malleability such that Layer 2 networks such as Lightning could implement primitive smart contracts.