- Upgrade will enable cheaper transactions
- SegWit reduces the block weight
- The step may increase the number of BTC transactions
BitMEX cryptocurrency exchange now officially supports the Bech32 address format. The addition now enables users to make cheaper bitcoin (BTC) withdrawals through the native SegWit format.
All Three Formats
The world’s leading cryptocurrency exchange in terms of reported volume announced via a blog post on December 12, 2019, that it now allows its customers to withdraw Bitcoin from their accounts using all three Bitcoin address formats (i.e., P2PKH, P2SH, and Bech32). The exchange stated:
“As of today, BitMEX is delighted to announce that customers can withdraw to all three address formats.”
According to the blog post, the current upgrade is a cog in the wheel of the firm’s plan to elevate its bitcoin wallet besides trying to reduce the usage of block weight to reduce the amount of fees customers are charged for to execute transactions. The main benefit of supporting Bech32 addresses is that users will not be adding 20 bytes overhead as they perform transactions via non-native wallets using SegWit, thereby enabling savings in transaction fees. The blog post explained:
“Since the savings are generated by the witness discount on the signature/scripts, the more inputs a transaction has, the higher the percentage savings. Therefore larger transactions, with more than one input, will typically experience higher savings.”
SegWit refers to an update created on the bitcoin blockchain in August 2017 to offer protection against transaction malleability while increasing block capacity. This is made possible by separating the data required to check the authenticity (witness) of a transaction from a list of transactional inputs. Additionally, SegWit enabled for blocks larger than 1 MB without a hard fork. SegWit is the update that’s expected to implement the Bitcoin Lightning Network.
Similar to BitFinex
The preceding announcement is significant in the crypto ecosystem since several cryptocurrency exchanges are burning the midnight oil to support faster bitcoin transactions at an affordable rate thanks to the introduction of SegWit addresses. Last October, Bitfinex announcement a similar update to its exchange to support bitcoin withdrawals through Bech32 addresses. BitMEX has put in place functionality that’s similar to what Bitfinex implemented. BitFinex had stated during its upgrade:
“As bech32 addresses only exist on the Bitcoin network, our new support for Bitcoin withdrawals to bech32 addresses removes the possibility of our clients experiencing any cross-chain mix-ups.”
As SegWit continues to gain popularity and to reduce bitcoin transaction fees, it is expected that the percentage of people opting for bitcoin transactions will increase. BitMEX would benefit from a block weight saving of around 65% by adopting SegWit,” said the exchange.