The SegWit update has been one of the most talked-about Bitcoin updates of recent times. SegWit, which stands for Segregated Witness, is a Bitcoin update which brings in fixes to many serious problems that have plagued the network. One of the biggest challenges that the SegWit update solves is that of Bitcoin’s scalability problem. This update increases the block size of Bitcoin and allows the implementation of the second-layer solutions for further improvement.
Simply put, the SegWit update tackles two problems - the increasing transaction fees and the increasing size of transactions.
SegWit on Bitcoin Core:
This much awaited update has now made its way to the Bitcoin Core Client, as well as to BitFinex. The Bitcoin Core Client introduced SegWit support for public on the 15th of February. The technology has been around since mid-2017, but was being tested for about six months now. “Bitcoin Core 0.16.0 introduces full support for segwit in the wallet and user interfaces,” the Bitcoin Core Github description reads.
SegWit is still quite a new technology and most wallets and exchanges have been slow to implement it. Moreover, other newer solutions which will help improve the scaling of the Bitcoin Network, such as the lightning network are also being introduced. With SegWit now on Bitcoin Core Client, expect more networks to implement it.
SegWit on BitFinex:
In addition to the Bitcoin Core Client, the SegWit update has also arrived for BitFinex! One of the biggest Cryptocurrency exchanges, BitFinex processes over $1 Billion in daily trade volumes.
In a blog post, the BitFinex CTO commented on the need for SegWit: “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.”
With the SegWit update, BitFinex intends to reduce the congestion on the network as well as increase the transaction capacity of the network.
SegWit on Coinbase:
While BitFinex and Bitcoin Core Client have already implemented the SegWit update, it is all set to come to Coinbase next week! Coinbase announced this update via a Tweet which read: “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 all customers by mid next week.” Following this Coinbase update, users will no longer be able to recover their Bitcoin Cash if they accidentally send it to a Bitcoin wallet.
Coinbase has been delaying this update for quite some time now. In December, they had stated that the reason for this delay was the fact that they store Billions of dollars on behalf of their customers and any update that they bring around should be implemented carefully. It looks like Coinbase is now confident about this upcoming update. It will be interesting to see when other major platforms and wallets bring forward this update.