Segregated Witness (SegWit) is an implemented protocol upgrade providing protection from transaction malleability and an increase of block capacity. SegWit defines a new structure called a witness that is committed to blocks separately from the transaction merkle tree. This structure contains data required to check transaction validity, but is not required to determine transaction effects. In particular, signatures and redeem scripts are moved into this new structure, which does not count towards the traditional 1 MB block size limit. Instead, a new weight parameter is defined, and blocks are allowed to have at most 4 million weight units (WU). A byte in the original 1 MB zone of the block weighs 4 WU, but a byte in a witness structure only weighs 1 WU, allowing blocks that are technically larger than 1 MB without a hardforking change.
SegWit was the last protocol change needed to make the Lightning network safe to deploy on the Bitcoin network.
Trezor with SegWit
See also our blog for more information about how Trezor works with SegWit.