A witness basically does 2 things: 1. Observe or experience something; 2. Tell others about what was observed or experienced. Different uses can emphasize one or the other. The witnesses in a wedding, for example, are primarily there to observe the wedding taking place (presumably so that if questions come up, they can testify that it happened). The witnesses in a court proceeding are primarily there to tell what they have observed or experienced. When Jesus says in Acts 1:8 that "you shall be My witnesses", he seems to primarily have in mind telling what you've seen and experienced in Him.
In Heb 12:1, some seem to assume that the cloud of witnesses is in "observing" mode - they're watching us. But in context, I don't think so. This is preceded by Heb 11, giving us testimony after testimony of what God's people have done through faith in God. *These* are the cloud of witnesses, testifying to what God does though faith. They're in "testimony" mode, not "observing" mode. And it's in view of their testimony that we're supposed to "lay aside every encumbrance and the sin that so easily entangles us". We're to do this, not because there's this big crowd watching us, but in view of their testimony of what God does in a life through faith.