Crypto history
2017: SegWit changes Bitcoin transaction accounting
Separating witness data addressed transaction identifiers and increased the capacity available under a block-weight limit.
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What changed
Segregated Witness activated in August 2017. BIP141 specifies a separate structure for witness data and a block-weight limit rather than treating every transaction byte identically. Updated nodes validate the witness under the new rules while compatibility with older nodes is maintained through the soft-fork design.
One important motivation was transaction malleability. A transaction identifier used by a later transaction could otherwise change because of alterations to signature-related data, even when the intended payment stayed equivalent. SegWit addresses this problem for the relevant transaction forms. It made reliable chains of unconfirmed transactions easier to design, an important building block for payment channels.
Why the activation debate mattered
Deploying consensus changes requires adoption by an ecosystem of users, miners, businesses and software maintainers. A published proposal does not itself switch the network's rules. That distinction explains why development history includes activation mechanisms and disagreements as well as code.
SegWit should also not be described as unlimited free capacity. Transactions still compete for constrained block space, and wallets must construct compatible spends to benefit. Lightning moved repeated payments into channels; it did not eliminate the need for onchain transactions or liquidity.