SegWit, or Segregated Witness, is the soft fork change in Bitcoin’s transaction, which has also been applied on other cryptocurrencies such as Litecoin, Vertcoin, and Digibyte. It is a protocol improvement that improves and facilitates scaling. In this way, users from exchanges that have adapted SegWit will have significantly lower transaction fees and improved transaction processing times throughout the network. SegWit separates the transaction data from the signature data, which consequently increases the block size limits.
While waiting for the off chain solution, Lightning Network, SegWit is used as additional solution to the scaling problems in the Bitcoin network.
On February 21, SegWit has officially arrived at Bitfinex and Coinbase. Bitfinex is a cryptocurrency exchanged based in Hong Kong, and is considered as one of the most significant exchanges in the cryptomarket. Coinbase, on the other hand, is a cryptocurrency platform operating the GDAX trading exchange. With the implementation of SegWit on these two platforms, Bitcoin is expected to be less congested in its network.
“Our engineering team has finished testing of SegWit for Bitcoin on Coinbase. We will be starting a phased launch to customers over the next few days and are targeting a 100% launch to al customers by mid next week.”
The SegWit implementation has long been planned by Coinbase since December 2017. During that time, Coinbase’s Vice President and General Manager, Dan Romero, indicated that Coinbase will launch the SegWit implementation by early 2018.
Bitfinex has also released an announcement regarding their implementation of SegWit. In their blogpost, Bitfinex mentions that the networks goes on scaling with SegWit. With the SegWit upgrade, Bitfinex updated its users that withdrawal fees will significantly decrease, and transaction times will improve across the network.
Bitfinex CTO, Paolo Ardoino, comments the following:
“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. By supporting SegWit addresses, Bitfinex is tackling three of the biggest crypto-enthusiast concerns: transaction fees, transaction speeds and total network capacity.”
With the implementation of SegWit on two of the most prominent cryptocurrency platforms in the world, the future for Bitcoin trading is bright. Hopefully, other exchanges would adopt the same upgrade, and further improve the standing of Bitcoin in the cryptocurrency market.