On August 8th, 2017, one of the most significant protocol upgrades in Bitcoin's history reached lock-in threshold on the network: Segregated Witness, or SegWit for short.

The lock-in was remarkable not just for its implications for the future of Bitcoin's functionalities, but also for the historic activation mechanism that would follow and set a powerful precedent for the decentralized movement behind the network.

Initially proposed by Blockstream’s Dr. Peter Wuille at Scaling Bitcoin in 2015, SegWit introduced a number of improvements to Bitcoin’s performance.

The proposal originally sought to fix an anomaly in the Bitcoin protocol that, while mostly harmless to the network itself, prevented the straightforward deployment of second layer solutions such as the Lightning Network.

SegWit further increased Bitcoin’s theoretical block size to four megabytes (although more realistically to around two megabytes), introducing block weight as a new measuring method as opposed to block size. This would enable fee savings for users.

Lastly, SegWit introduced “script versioning,” a protocol extension that paved the way for the integration of further scaling and privacy solutions such as Schnorr Signatures and Taproot.

The upgrades were especially notable as SegWit did not require a hard fork for its implementation. Instead, a backward-compatible soft fork protocol upgrade was used to activate SegWit.

Yet the proposal ignited a year-long debate between Bitcoin companies and users, with a number of mining pools controlling substantial amounts of hash rate threatening to block the upgrade should certain demands not be met. Among them: Bitmain's Antpool, which, under the leadership of Jihan Wu, indicated it would only signal support for SegWit if Bitcoin Core developers agreed to implement a block size increase to go with it.

It was a grassroots movement that eventually demonstrated the Bitcoin network could not be controlled by large companies through the politicization of mining power: after pseudonymous developer Shaolinfry proposed the concept of a User-Activated Soft Fork (UASF), Bitcoin users took matters into their own hands, presenting a forcing function to miners that eventually led to the activation of SegWit on August 23rd of 2017.

Being a backward-compatible soft fork, adoption of SegWit post-activation was a gradual process, and a sluggish one at the beginning. Two years after SegWit had been activated, network-wide adoption lingered around 36%; many users relied on Bitcoin service providers such as exchanges and wallet software to integrate SegWit. By June 2021, adoption had risen to over 50%, before spiking to over 73% at press time.

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