Exchanges Follow as New Bitcoin Core version 0.16.0 Introduces SegWit Support
The new Bitcoin Core 0.16.0 update has finally been released as of February 15 and has started the rollout for full SegWit support in the wallet and user interfaces. Segregated Witness, often abbreviated as ‘SegWit’, is the process that dynamically adjusts block size and transaction weight depending on requirements. After plenty of controversy by individuals that largely believed in increasing the block size limit altogether, SegWit was finally brought to bitcoin in August 2017.
SegWit, despite being launched several months ago, does not account for more than 20-30 percent of total transactions. Each organisation has its own processes for updating to SegWit and it is clear that universal support is far off still. Given that one of the biggest problems of the blockchain today is scalability, support for SegWit is almost required.
In the new update, which also supports native SegWit addresses named ‘bech32 addresses’, newly generated user wallets will be automatically compatible with the scaling feature. Due to the SHA256 hashing optimizations for architectures supporting SSE4, that could result in approximately 50 percent speedups on supported hardware.
For the aim of more than 95 percent wallets to be running SegWit it is necessary that major cryptocurrency exchanges adopt it too. Bitfinex has already announced that it is updating to SegWit for lower bitcoin fees and faster transaction times. Bitfinex CEO, Paolo Ardoino, said, “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 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.”
Coinbase, a United States based exchange, also announced that it would soon be rolling out SegWit support due to the overwhelming amount of feedback the company received from its user base. Exchanges, after all, are notorious for ramping up the transaction fees to provide a smooth and consistent experience to the end user. Coinbase was soon followed by their sister exchange, GDAX.
Bitcoin’s upcoming Lightning Network was also suggested as a means to make the bitcoin network near instant. As reported, “(The) Lightning Network is a decentralized network of payment channels which permit users to make micropayments between two parties without the need to broadcast directly to the blockchain. As a result, transaction fees are decreased and the speed of the whole payment process is too.”