BitMEX Enables SegWit Withdrawals

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Prerna Sengupta
Prerna Sengupta is a writer for Thecoinrepublic. She is a law student at NALSAR University of Law, Hyderabad. She is interested in Tech Law and is especially keen on cryptocurrency, blockchain, and Bitcoin. She hopes to pursue this field in the future as a lawyer.
BitMEX Enables SegWit Withdrawals

  • Cryptocurrency exchange BitMEX added support for native segregated witness (SegWit) addresses for Bitcoin (BTC) withdrawals.
  • BitMEX users now have permission to withdraw Bech32 addresses, the ones that natively support the segregated witness standard.
  • Native SegWit support is currently only available for withdrawals from bitcoin and not deposits.

According to an announcement made on December 12, cryptocurrency exchange BitMEX added support for native segregated witness (SegWit) addresses for Bitcoin (BTC) withdrawals. It allows users to pay lower transaction fees. BitMEX users can now withdraw Bech32 addresses which natively support the segregated witness standard.

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BitMEX reported the news on Thursday that the native SegWit support is currently only available for withdrawals from bitcoin and not deposits. The Pay to Script Hash (P2SH) format addresses should use while depositing to BitMEX owing to their multi-signature wallet solution.

Transaction fees saved when transferring to a Bitcoin that has already sent to a Bech32 address which is a significant advantage of a Bech32 address. Therefore, this change will not directly result in payment savings when customers withdraw from BitMEX. Still, when the drawn Bitcoin is spent again in the next transaction, lower transaction fees may prove to be advantageous to customers.

Bitfinex exchange also added support for bitcoin withdrawals to native SegWit in October. SegWit is an optional upgrade to blockchain networks protocol that helps accommodate more transactions in one block (1 MB size) and thus helps lower transaction costs.

What Impact will segwit Bring?

Segwit transactions are at least 25 percent smaller in size relative to legacy transactions, depending on various criteria. Recently it has been stated that the percentage of transactions using SegWit has jumped from below 40 percent in months before that to around 55 percent in September.

SegWit will lead to significant block weight savings of about 25 percent to 40 percent, but the savings will be even higher in the case of BitMEX.

A transaction of 3 out of 4 multi-signature P2SH is a withdrawal of BitMEX. The advantages of applying the witness discount to these large transactions are much higher than in typical non-BitMEX transactions. Therefore, by implementing SegWit, BitMEX will benefit from a blockweight saving of about 65%.

Recently, the number of SegWit transactions on the network has reached 50 million and has been increasing steadily — probably due to the development and deployment of significant cryptocurrency platforms.

According to transactionfee.info, in October’s first half and towards the end of November, the percentage of such transactions almost reached 58 percent. The figure currently stands at 56 percent.

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