Segregated Witness (SegWit) is a protocol enhancement introduced in select blockchain networks, notably Bitcoin, aimed at tackling scalability concerns and enhancing transaction processing efficiency. It was deployed on the Bitcoin network in August 2017 as a soft fork, ensuring compatibility with prior protocol iterations.

Here's an explanation of Segregated Witness and its key features:

1. Transaction Format: Each transaction in a typical blockchain network, such as Bitcoin, consists of inputs and outputs. The inputs are destinations for the transferred monies, while the outputs are references to previously unspent transaction outputs (UTXOs). On the blockchain, these transactions are kept in blocks.

2. Witness Data: Witness data, including as scripts and signatures, are isolated from transaction data using segregated witness. Witness data makes up a sizable amount of a transaction's size, particularly in those with several inputs or intricate scripts. SegWit decreases the size of transactions by splitting the witness data, enabling more transactions to be included in each block.

3. Block Size Limit: Segregated Witness was created primarily to address the block size restriction controversy within the Bitcoin ecosystem. By shifting the witness data outside of the block, SegWit effectively raises the effective block size limit. This enables more transactions to be included in each block without going over the 1 MB block size limit.

4. Transaction Malleability: SegWit resolves a long-standing problem called transaction malleability, which gave attackers the ability to change a transaction's transaction ID (TXID) without nullifying its signature. Problems with transaction tracking and the deployment of second-layer solutions, such as the Lightning Network, may result from this issue.

5. Compatibility: SegWit is designed to be backward compatible with older versions of the Bitcoin protocol. This means that non-SegWit nodes can still process SegWit transactions, although they may not fully benefit from the improvements offered by the protocol upgrade.

6. Benefits: The Bitcoin network can gain from the use of Segregated Witness in a number of ways, including better security, reduced transaction costs, greater transaction throughput, and support for the use of second-layer scaling solutions like the Lightning Network.

All things considered, Segregated Witness is a major improvement to the Bitcoin protocol, resolving some of its main security and scalability issues and opening the door for more advancements and enhancements in the cryptocurrency space.