With two major Bitcoin exchanges announcing the implementation of SegWit on the same day, its effect has been felt, especially in lowering the fees for Bitcoin transactions.
A wave of mass adoption coinciding with the digital currencies rally towards $20,000 last year was mirrored with rising fees and longer waiting times, but the transaction fees have now fallen to a six month low thanks to the implementation of Segregated Witness.
Cheaper than the competitor
It has been estimated that Bitcoin has managed to slice its fees as much as 97 percent from its peak. There were reports of fees being as high as $34, but now, transactions are going through with fees of as little as $0.79.
These fees are essentially lower than that of Bitcoin Cash, whose sole mandate was to provide an alternative to Bitcoin without the high fees and the long waiting time.
Bitcoin Cash was a proposed scaling solution that was taken off-chain as there was a disagreement with on-chain solutions, such as SegWit. There is also another on-chain solution in the pipes, the lightning network.
SegWit was agreed upon and accepted through last year, but it has taken exchanges a while to make the change to be fulling inclusive and implement SegWit. However, the fact that Bitfinex, and Coinbase, have opened their doors to SegWit means there is a mass influx of Bitcoin addresses now operating SegWit.
“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 percent launch to all customers by mid next week.”
Bitfinex CTO, Paolo Ardoino said of their implementation:
“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.”