With the increase in SegWit adoption as marked by Bitfinex, Kraken, and Binance, the users get to benefit from lower bitcoin withdrawal fees. The reduction in cost is as much as 50 percent that showcases the impact of SegWit in the cryptocurrency market.
Top crypto exchange Binance, Bitfinex, & Kraken adopted SegWit
It has been the starting of the year when SegWit was released on bitcoin network, but there has been little interest towards this fork. Now, after a couple months, it is finally coming out positively. As a result, bitcoin transactions has become cheaper even more so than ethereum in some cases.
Due to the reason that the cryptocurrency exchanges set their own fees, users haven’t been able to get the benefit of cost savings. It used to cost somewhere around $10 to withdraw your BTC from exchanges like Binance or Kucoin until last week.
With the adoption of SegWit finally on the rise, users will be able to enjoy the benefits of lower fees. For instance, now you can withdraw your BTC from Binance at $5.70 or 0.0005 BTC. Whereas Bitfinex has cut down about one third off its fees meaning it will cost you now 0.0004 BTC. The exchange claims Segwit being the reason for this saving.
Additionally, another exchange Kraken has brought down its fees to 0.0005 BTC and BCH withdrawals to 0.0001. Now, BTC withdrawals will cost you $5.70 and BCH 13 cents. Though Coinbase was the first exchange that announced the adoption of SegWit, it has yet to lower its fees
Given the situation right now, about 30 percent of all the network transactions utilize SegWit. Though it is not enough and needs to be way above 50 percent, that’s yet to be seen.
Bitcoin SegWit adoption on the rise
The reduction in the exchange fees that led to user savings has been attributed to two reasons i.e. SegWit and transaction batching. After GDAX and Coinbase supported SegWit adoption, the adoption increased from 20 to 30 percent. Furthermore, with Bitfinex’s adoption, it doubled in just two days.
This widespread increase in SegWit adoption has decreased the pending transactions significantly.
Exchanges send a large number of bitcoins that too simultaneously and this is where batching has the potential to cut down the costs even more.Though determining the percentage of transactions that are being batched is difficult, there is certainly a rise and batching is increasingly being used.
The current SegWit adoption is on the rise and encouraging but only time will tell how the situation will further evolve. Moreover, there are still a few companies that have yet to make any decision regarding SegWit integration.
What are your views on SegWit adoption and will it help in boosting the bitcoin price? Do you think this much price reduction is enough for a user? Let us know below!
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I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.