SegWit is the process by which the block size limit on a blockchain is increased by removing signature data from Bitcoin transactions. When certain parts of a transaction are removed, this frees up space or capacity to add more transactions to the chain. Segregate means to separate, and Witnesses are the transaction signatures. Hence, Segregated Witness in short, means to separate transaction signatures.

Segwit, or segregated witness, refers to one specific part of any bitcoin transaction. The blockchain ledger works by publicly recording and verifying every transaction that goes through it, meaning it’s nearly impossible to fool or spoof. That authentication data, known as the “signature” or “witness” part of the transaction, actually ends up taking up a lot of space in each transaction.