SegWit improves block transaction capacity by changing how …

SegWit improves block transaction capacity by changing how block size is measured, effectively increasing the limit without a hard fork.
Block Weight Limit: SegWit replaced the 1 MB block size limit with a 4 million weight unit (WU) limit.
Weight Calculation: Data is counted differently:
Non-witness data (transaction info): 1 byte = 4 weight units.
Witness data (signatures): 1 byte = 1 weight unit.
Increased Capacity: Since witness data can make up ~65% of a transaction, moving it to a discounted-weight section allows more transactions to fit within the 4M WU limit. This enables effective block sizes of 2-3 MB (and up to 4 MB theoretically), increasing transaction throughput by roughly 1.7 to 2 times compared to the legacy 1 MB limit. Legacy nodes see only the stripped-down, under-1MB version, ensuring backward compatibility.