A software upgrade to make bitcoin’s underpinning network faster officially reached its lock-in threshold on August 8 2017 – and because of SegWit’s two-week “grace period,” the change won’t “activate” until block 481,824, which is currently projected to happen somewhere around August 23.
While the lock-in ensured SegWit would become a part of the network, bitcoin services still need to upgrade their software to support the new style of transactions. After activation miners will start rejecting blocks that do not support the change.
First proposed by Bitcoin developer Pieter Wuille in December 2015, the expectation for SegWit is that it will open up several ways to scale bitcoin to support more users and ultimately process more transactions. While this doesn’t seem particularly contentious, it has been the subject of tireless debate within the bitcoin community.
As bitcoin has gained traction among consumers, its network, which was built to only handle a set number of transactions, has slowed. SegWit ensures at least some sort of scaling-related tech will be added to the Bitcoin network, without the creation of an entirely new blockchain to get there.
Segregated Witness, or SegWit, is the name used for a proposed soft fork change in the transaction format of the cryptocurrency Bitcoin which has already been implemented on Litecoin . The formal title “Segregated Witness (Consensus layer)” has Bitcoin Improvement Proposals number BIP141. It is intended to solve a blockchain size limitation problem that reduces Bitcoin transaction speed. It does this by splitting the transaction into two segments, removing the unlocking signature (“witness” data) from the original portion and appending it as a separate structure at the end. The original section would continue to hold the sender and receiver data, and the new “witness” structure would contain scripts and signatures. The original data segment would be counted normally, but the “witness” segment would, in effect, be counted as a quarter its real size. – Wikipedia
The function of SegWit that so interests its supporters, is that it removes transaction signatures from bitcoin blocks—the batches of transactions that are approved every 10 minutes. This will increase room for transactions by about 60%, reducing the time users wait for transactions to be approved. It is supposed to make using bitcoin cheaper, faster and more secure.
What miners need to know about SegWit vs what ordinary users need to know
By now miners and nodes in the network will have installed or be thinking about installing the new version of the Bitcoin core software that implements the improvements. Ordinary users of Bitcoin don’t need to take any steps, as the changes will be completed through the software upgrades made by the miners.
For the ordinary user, their wallet applications will work fine, though their wallet service may upgrade for more compatibility.