Good morning! You're correct that SegWit (Segregated Witness) didn't remove any data from the Bitcoin blockchain. Instead, it restructured how data is counted and stored, allowing more transactions to fit into a block. Here's how it works:
### Key Changes with SegWit:
1. **Witness Data Separation**:
- Before SegWit, all transaction data (including signatures) was counted equally toward the block size limit of 1 MB.
- SegWit separated the witness data (signatures) from the transaction data, storing it in a separate part of the block.
2. **New Weight Unit (WU) System**:
- SegWit introduced a new way to measure block size using **weight units (WU)** instead of just bytes.
- Non-witness data (e.g., transaction inputs and outputs) is counted as 4 WU per byte.
- Witness data (e.g., signatures) is counted as 1 WU per byte.
- This means witness data now takes up less "effective space" in the block.
3. **Block Size Limit Increase**:
- The block size limit was effectively increased from 1 MB to 4,000,000 WU.
- Since witness data is counted at 1 WU per byte, a block can now hold more witness data without exceeding the limit.
- In practice, this allows blocks to hold up to ~4 MB of data, but only if most of the data is witness data.
### How More Transactions Fit:
- By counting witness data at a lower weight (1 WU per byte), SegWit reduces the "cost" of including signatures in a block.
- This frees up space for more transactions, as the non-witness data (which is more critical for validating transactions) can now occupy a larger portion of the block.
- For example, a block could contain 1 MB of non-witness data and 3 MB of witness data, totaling 4,000,000 WU (1 MB * 4 WU/byte + 3 MB * 1 WU/byte).
### Summary:
SegWit didn't remove any data but redefined how data is counted. By assigning a lower weight to witness data, it effectively increased the block capacity, allowing more transactions to fit within the 4,000,000 WU limit. This is how Bitcoin achieved greater transaction throughput without directly increasing the block size limit in bytes.