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BitMex adopts SegWit five years after its activation in Bitcoin

After 5 years of existence in the Bitcoin network of the function of segregated witness ( Segregated Witness or SegWit, for its acronym in English), the cryptocurrency exchange BitMex added support for BTC withdrawals using this format. This will allow users to pay lower fees and the exchange to save 65% on block weight.

According to a statement published on March 18, 2021, BitMex announced that will allow its users to withdraw bitcoin with the Bech32 addresses , which are the ones that natively support the segregated token standard.

The company expands on this idea in the following tweet:

We will soon issue Bech32 addresses to all new BitMex users and migrate current users to new directions in the next phases. We are excited about this because it will help increase efficiency and reduce withdrawal fees (on the Bitcoin network).

It is worth remembering that the exchange had already posted on its blog, on December 12, 2019, a press release announcing the enablement of support for shipments in Bech32 format. On that occasion, BitMex recalled that the Bitcoin network supports three address formats.

The first, the format original address, is the one that involves paying the public key hash (P2PKH), whose addresses begin with the number 1.

The second format is the payment script (P2SH), which allows users to send bitcoin to a secured address via a script without knowing details about it, like a wallet with multiple signatures. This is the type of address where BitMex users deposit their funds. P2SH addresses start with the number 3.

The third is the Bech32 format, also called the native SegWit format, which starts with a bc1 and allows users to take full advantage of token scalability segregated, greater efficiency and lower rates.

The company reported that when spending from a format other than Bech32, the user adds about 20 bytes of transaction data. It also points out that the native expenses of SegWit save around 37%, compared to traditional transactions; and 17% relative to non-native SegWit transactions.

As explained above, SegWit can result in significant savings of around 25 to 40% of weight in one block. However, in the case of BitMex, the savings will be even greater. A BitMex withdrawal is a 3 to 4 multi-signature P2SH transaction, each entry therefore requiring three digital signatures and four public keys. Currently a typical withdrawal on BitMex is 2 inputs and 2 outputs, and can be as large as 1,200 bytes. The benefits of applying the segregated token discount to these large transactions are much greater than for typical transactions. Therefore, BitMex will benefit from around 65% block weight savings by adopting SegWit.

BitMEX.

Binance also supports SegWit deposits for bitcoin

In addition to BitMex, other exchanges, such as OKEx and Gemini, incorporated SegWit in 2019. The most recent case is that of Binance. The company informed through a statement published on its official site on December 25, 2020 about the incorporation of the protocol for BTC deposits (withdrawals already were admitted from before). “By selecting the BTC (SegWit) network, users will be able to transfer funds to the SegWit address (bech32),” notes the note.

For December 2020 Binance announced the incorporation of SegWit for bitcoin deposits to the platform. Source: QuinceCreative / pixabay.com

Binance clarified the following in the text : «Keep in mind that SegWit should help reduce commissions. However, if you mistakenly send incompatible assets to this address, your funds will not be recoverable and the result will be a permanent loss. ”

What is SegWit and how is its adoption going?

The protocol began to be used in the Bitcoin network since 2016. By 2021, almost five years have passed since this fact. The adoption process has been slow but steady. In this time the protocol has gone a long way towards full acceptance, despite the advantages it offers. At the time of writing this note, it has a 48% adoption rate, according to analyst Willy Woo’s metrics.

It is worth clarifying that, although this option has been used since 2016, it had not had at that time the approval of at least 95% of the miners of the network – something necessary for its complete activation. Therefore, its final implementation on the network was carried out with a soft fork ( softfork ) in 2017. This, translated to the average user, basically meant that a software update was made to improve the network, without a drastic change occurring, such as a fork in two different chains.

such as It is explained by the Glossary of CriptoNoticias SegWit ( Segregated Witness ), officially known as BIP141, is a protocol proposed by Peter Wuille and applied to Bitcoin. Its function is to increase the capacity of the blockchain. Thus, instead of increasing the block size, “transaction signatures are redistributed, freeing up space and even allowing them to push their limit to about 2MB.”

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Sandra Loyd
Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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