Two of the world’s largest cryptocurrency exchanges – Coinbase and Bitfinex – have announced they are integrating Bitcoin’s Segregated Witness (SegWit) protocol.
In a blog post on Medium, Coinbase’s Vice President and GM Dan Romero, said that the exchange is planning to implement the SegWit protocol this year. However, he did not provide any specific details as to how and when. Instead, he said the top priority of Coinbase is securely storing customer funds. “We store billions of dollars worth of bitcoin on behalf of customers and any change to our infrastructure is done with significant planning and consideration for the security and stability of our platform,” he wrote. Other priorities are platform performance during periods of peak volume and the addition of new features for the customers.
Also on Medium, Bitfinex announced it is already supporting deposits and withdrawals using SegWit addresses. The exchange has set up new SegWit wallets for its clients. In order to use them, the users have to generate a new deposit address, which will start with “3”. By using the new SegWit wallets, Bitfinex’s clients can benefit from lower BTC withdrawal fees (around 15%) and faster transactions across the bitcoin blockchain.
“As a premier exchange, Bitfinex is committed to improving its market-leading offering for our loyal and discerning customers. SegWit provides not only an immediate benefit for users, but also a foundation for future Bitcoin development,” Bitfinex said in its post. “By supporting SegWit addresses, Bitfinex is tackling three of the biggest crypto-enthusiast concerns: transaction fees, transaction speed, and total network capacity. We are delighted that through this implementation we can provide our customers with bitcoin withdrawal fees that are up to 20 percent lower, as well as faster-than-ever transaction speeds.”
The SegWit protocol is not to be confused with last November’s Segwit2x bitcoin fork that did not happen.
The SegWit protocol is an upgrade of the blockchain network that increases the size of the blocks from 1MB to 1.8MB. This makes the transactions faster, cheaper and more secure.
The SegWit upgrade was activated in August of 2017, but so far only about 12% of the Bitcoin blockchain transactions are using it. It is expected that with the implementation from Coinbase and Bitfinex the percentage will increase significantly.