The witness discount refers to the reduction in data “weight” given to the witness portion of a Bitcoin transaction — the part that contains the signatures used to prove ownership. Implemented as part of the 2017 segregated witness (SegWit) upgrade, this discount effectively lowered the fees for SegWit transactions by making the witness data count for less when calculating the total size of a transaction.

In simpler terms, the witness data gets a 75% discount, meaning that it only counts as one-quarter of its actual size when determining how much space it takes up in a Bitcoin block. This allows for more transactions per block and reduces costs for users who adopt…

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