At long last, Coinbase’s popular US-based digital asset exchange GDAX now supports Segregated Witness (SegWit) transactions on the Bitcoin network.
What is SegWit?
SegWit — short for Segregated Witness — is an important soft fork upgrade to the Bitcoin network which makes transactions significantly more secure and efficient. When sending transactions with SeqWit, the main part of the transaction is effectively segregated from the portion which authorizes it. In turn, this makes Bitcoin transactions even more secure.
Perhaps even more exciting to some is the fact that SeqWit also minimizes the size of individual transactions, which significantly improves the Bitcoin network’s total capacity.
SegWit on GDAX
GDAX users needn’t worry about any major changes to how they conduct transactions. As noted by the exchange’s official blog, transactions from GDAX to an external address automatically take place using SegWit – thanks to the fact that the soft fork upgrade is backward compatible with even old Bitcoin addresses.
If you want to deposit Bitcoin into your GDAX account from another source, the exchange automatically provides a SegWit address compatible with BTC wallets.
However, there is one extremely important change that is worth mentioning. SegWit wallet addresses will not share the same format as Bitcoin Cash (BCH), so don’t even think about sending your BCH to a BTC address – unless you want to permanently lose all of your BCH.
Next Up: Lightning Network
SegWit support certainly gives GDAX users cause for celebration, but the best may still be yet to come.
As noted by GDAX’s official blog:
SegWit is an important step in scaling the Bitcoin network. We are continuing to invest in our Bitcoin infrastructure and we will be working on implementing additional Bitcoin scalability improvements like transaction batching and improved UTXO management. We hope this will all result in lower fees for customers and more capacity on the Bitcoin network.
Most exciting, however, is the exchange’s commitment to implementing the Lightning Network — a second-layer payment protocol allowing for instantaneous Bitcoin transactions. Once implemented, transacting Bitcoin will truly be better than ever.
Are you excited about SegWit support on GDAX? Are you looking forward to the exchange’s support of the Lightning Network? Let us know in the comments below!
Images courtesy of Shutterstock, GDAX