Binance Now Supports Deposits to SegWit Bitcoin Addresses

Leading cryptocurrency exchange, Binance announced today that it now supports deposits to Native Segwit addresses for Bitcoin transactions.

As part of a recent platform upgrade, Binance users are now provided with SegWit (bech32) addresses and can opt to receive funds through this channel in addition to being able to withdraw to external wallets.

Binance decision to support Segwit deposits comes roughly three years after bitcoin developers first activated the protocol via a soft fork in 2017.

Segregated Witness (shortened as SegWit) is a protocol upgrade that separates bitcoin transaction signatures from transaction data, thus allowing for more transactions to be bundled into a bitcoin block. Thus, the bitcoin network can process more transactions faster and for cheaper fees.

For users moving funds to Binance via the newly supported addresses, the primary benefit is to save on fees, while also lowering the confirmation time for their transactions. The native Segwit address starts with “bc1” and only include only lower case letters.

By adding the new feature, Binance has become one of the few exchanges to support both withdrawals and deposits to Segwit bitcoin addresses. While a number of exchanges support withdrawals to Native Segwit addresses, only a few support deposits to their platform via that route.

Also, platforms like Blockchain.com with millions of users are yet to roll out Segwit support.

Segwit Adoption Boosts Bitcoin Scalability

In theory, more Segwit adoption by large cryptocurrency exchanges like Bitcoin will improve the scalability of the bitcoin network, since more transactions can go on-chain, and users will spend lower fees.

Segwit Usage data

The above chart from Blockchair.com shows that Segwit usage currently comprises around 40% of all bitcoin transactions. More exchanges particularly need to adopt the protocol to further improve Bitcoin’s processing capacity and overall scalability.

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Author: Wilfred Michael

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Author: Wilfred Michael