According to the announcement from BitMEX, the update allows users to save on transaction fees while also contributing to a less-bloated Bitcoin blockchain.
A Bech32 Bitcoin address is a Segregated Witness (SegWit) address format specified by Bitcoin Improvement Proposal (BIP) 0173.
While SegWit had been implemented in 2017, some cryptocurrency platforms have been slow in adopting it.
BitMEX Enables Bech32 Sending Support
BitMEX is delighted to announce that customers can now withdraw bitcoin to the Bech32 (native SegWit) address format. This upgrade is effective immediately.https://t.co/cKnUUJvKdK@bitcoinoptech pic.twitter.com/q0DVeq0tjS
— BitMEX Research (@BitMEXResearch) December 12, 2019
The Bech32 format starts with the alphanumeric characters “bc1” and provides better protection against typing errors. It also fixes transaction malleability.
Moreover, SegWit increases the maximum block size limit, effectively increasing transaction capacity and lowering fees. A typical transaction from a Bech32 address can save the sender from 17 percent up to 37 percent on fees, according to BitMEX.
BitMEX Wallet Solution in Progress
BitMEX will continue to use Pay to Script Hash (P2SH) addresses for deposits, due to their multi-signature wallet solution.
The company also confirmed that it is working on implementing a SegWit solution for its wallet.
An upgrade to SegWit addresses is seen as a highly desirable update by the larger cryptocurrency community, due to the beneficial effect on transaction costs as well as blockchain “health.”
Bitfinex is another major cryptocurrency platform that recently enabled SegWit — with both deposits and withdrawals being supported.
SegWit Transactions Cross 50%
Recently the number of SegWit transactions on the network had surpassed 50 percent and has been steadily increasing — likely due to large cryptocurrency platforms testing and implementing support.
According to transactionfee.info, the percentage of such transactions has hit a peak close to 58 percent in the first half of October and at the end of November. Right now the figure stands at 56 percent.
With reports that more cryptocurrency exchanges are looking into supporting SegWit addresses, the share of transactions should continue to trend upwards.