Binance Enables SegWit Support for BTC Deposits as Adoption Skyrockets
Binance, one of the largest cryptocurrency exchanges by volume in the world, has incorporated Segregated Witness, better-known as SegWit, support for Bitcoin deposits.
The SegWit support was finally enabled for incoming deposits on Christmas Eve, Binance said in an official statement. Until this announcement, the protocol upgrade was enabled only for withdrawals. Effective immediately after the announcement, Binance users got the option to transfer funds to a SegWit address by selecting the BTC (SegWit) network. Binance further explained in the statement:
“Please note that SegWit should help reduce fees; however, if you incorrectly send incompatible assets to the desired address, your funds will not be recoverable, and therefore will result in permanent loss.”
Implemented back in 2017, SegWit is a Bitcoin protocol upgrade designed to help with network scaling. Besides that, SegWit was implemented to help with fixing several associated bugs. This upgrade is known for the way it updates data on the blockchain, namely, by segregating signatures from transaction data. SegWit upgrade allows more transactions to be stored in a single block, thus doubling Bitcoin’s transaction capacity.
Data from transactionfee.info show that somewhere in the ballpark of two-thirds of Bitcoin payments currently use SegWit. However, even with SegWit implemented, Bitcoin continues to face scalability limitations, which many argue has impeded adoption for everyday use. Exactly those scalability limitations have transformed Bitcoin from a possible means of payment to a store of value. However, developers have not given up on BTC becoming a viable payment protocol.
The Lightning Network has been proposed as a viable second-layer scaling solution for Bitcoin as a payment protocol. Unlike SegWit, which got implemented via a soft fork to the Bitcoin protocol, the Lightning Network is a layer that goes on top of Bitcoin, and that could enable instant and almost cost-free transactions.
Despite current limited transaction capacity, Bitcoin remains the uncontested leader of the digital currency market, with its dominance over other crypto assets recently hitting one-year highs and approaching dangerously close to 70% of the total cryptocurrency market cap.