SetWit was first introduced by a developer named Pieter Wiulle at the Scaling Bitcoin conference in 2015. In his presentation, Wiulle said that bitcoin could be scaled by implementing a new protocol to bitcoin's core code, which would allow bitcoin to complete more transactions per second by removing certain data normally recorded on its blockchain and storing it outside the block in which the rest of the data pertinent to the transaction is usually stored. He said that this would fix a bug in bitcoin's code called "transaction malleability," which allows anyone to change small details that modify the transaction's identifier, as well as its subsequent hash. By removing this signature information and storing it outside of the block, Wiulle said that the protocol upgrade could not only solve the potential vulnerabilities caused by transaction malleability, but also streamline the process of recording transactions on the blockchain, allowing the protocol to process more transactions per second.
- What is SegWit?. Coindesk.