Coinbase to Integrate SegWit by February
Coinbase, the world’s largest cryptocurrency brokerage, wallet, and exchange which also operates GDAX, the Global Digital Asset Exchange, has officially announced that it will complete the integration of Segregated Witness (SegWit) in the coming weeks.
Our engineering team has begun the final testing phase of SegWit for Bitcoin on Coinbase.
SegWit compatible Bitcoin sends/receives will be available for customers in the next few weeks.
We previously wrote about SegWit on our blog: https://t.co/3YPQPkYy4C
— Coinbase (@coinbase) February 5, 2018
In December 2017, Coinbase vice president and general manager Dan Romero promised the company’s investors and users that Coinbase would integrate the Bitcoin Core development team’s transaction malleability fix and scaling solution SegWit within 2018. The company was met with some criticism regarding the lack of SegWit and transaction batching, both of which can alleviate pressure on the Bitcoin blockchain.
“In terms of our engineering priorities, securely storing customer funds remains our top priority. Our next priority is to ensure that our platform remains performant during periods of peak volume. Following security and performance, we are focused on adding new features for our customers. We store billions of dollars worth of bitcoin on behalf of customers and any change to our infrastructure is done with significant planning and consideration for the security and stability of our platform,” Romero noted at the time.
Coinbase is one of the few major cryptocurrency trading platforms to not experience a large-scale hacking attack. Most recently, Coincheck lost over $530 million worth of NEM in the biggest security breach in the history of the market and Bitfinex have experienced several attacks, the most recent of which led to more than $70 million in losses.
The Coinbase development team explained that implementing segwit is more difficult and would require significantly more resources because the platform is significantly larger than similar trading platforms and wallet applications.
With millions of active users, Coinbase accounts for a large portion of the daily trading and transaction volume of bitcoin. Coinbase and Blockchain.com are two of the largest bitcoin wallet platforms globally and both are yet to integrate SegWit.
The integration of SegWit by Coinbase along with transaction batching is expected to decrease congestion on the Bitcoin network and substantially reduce transaction fees.
According to Blockchain.com, the Bitcoin blockchain network is currently processing about 237,000 transactions per day and the size of its mempool remains at 26 million. In a state like this, bitcoin transaction fees cost below $0.1.
Low fees are necessary and crucial for newcomers and casual users. With fees above $1, bitcoin payments under $10 become highly impractical and inefficient.
Evidently, fees are low and the size of the bitcoin mempool has decreased significantly because the price of bitcoin has dropped and the daily transaction volume of bitcoin has halved since January. The integration of SegWit and other innovative scaling solutions by companies in the size of Coinbase could have a long-lasting impact on the scalability of bitcoin.
About Joseph Young
Joseph Young is a finance and tech journalist based in Hong Kong. He has worked with leading media and news agencies in the technology and finance industries, offering exclusive content, interviews, insights, and analysis of cryptocurrencies, innovative and futuristic technologies.