Coinbase Announced SegWit Support as Bitcoin Transactions Fees Drop Majorly
Coinbase has finally announced support for SegWit enabled Bitcoin transactions, resulting in lower fees for users.
As per an official announcement, Coinbase has finally added support for SegWit, and will be rolling out SegWit compatible Bitcoin transfers for all users in the coming days.
Even though Coinbase is one of the most popular cryptocurrency exchanges, particularly in North America, it received a lot of criticism on its slow progress towards SegWit implementation.
Support for SegWit is a major step forward and was, for a long time, the most demanded upgrade by Coinbase users since it impacts transaction fees.
Since the Bitcoin network has been clogged recently, transaction fees sky-rocketed, making it nearly impossible to make small transactions. SegWit reduces the size of these transactions, allowing more of them to be processed in each block, thereby reducing scarcity and consequently fees.
However, the company also alerted users that due to the upgrade, instances where Bitcoin Cash (BCH) is mistakenly sent to Bitcoin (BTC) addresses, will result in permanent losses. To mitigate such incidents, a new warning will show up on the deposit prompts.
Moving forward, the company shared its commitment to invest in its Bitcoin infrastructure in order to roll out newer updates to improve scalability, transaction batching and UTXO management, all of which will have positive effects on transaction fees users pay.
A few hours ago Charlie Lee also Tweeted about Coinbase and GDAX supporting SegWit ‘M’ addresses for Litecoin, which should further increase the coin’s utility as a low-fee, fast-transfer alternative to Bitcoin.
While Bitcoin’s sky-high fees caused a lot of debate and discussion over its long-term potential, it is interesting to note that transactions fees are now significantly lower than December peaks, but the price is finding it difficult to stay above $10,000.
At the time of writing, the average next block transaction fee is 70 Sats/byte, 3 blocks fee is also 70 Sats and 6 blocks fee is 10 Sats/byte. In dollar figures, you can compare December’s peak average fee of $37.49 with the early February peak of $4.35 and yesterday’s average of $2.67.