Definition: SegWit stands for Segregated Witness. It separates (segregates) the digital signature (witness) from the rest of the transaction data.
Core Logic:
Increased Capacity : By moving signatures out of the main block data, each block can fit more transactions.
Lower Fees : Since transactions take up less digital "space," users pay lower fees to get their transactions processed.
Fixing Bugs : It solves the "Transaction Malleability" issue, which was essential for building advanced tech like the Lightning Network.
Backward Compatibility : It allows seamless transfers between old (Legacy) and new (SegWit) address types.