Binance Announces SegWit Support For Bitcoin Deposits

January 1, 2021

by CCM

Binance Announces SegWit Support For Bitcoin Deposits

Last updated on December 5th, 2022 at 02:41 pm

Leading cryptocurrency exchange Binance has announced that it has enabled Bitcoin deposits on the Native Segregated Witness addresses (SegWit). Initially, the support for SegWit was only for withdrawals, but traders and investors can now make both deposits and withdrawals via the SegWit address.

The Binance platform has been making some upgrades in a bid to solve scalability issues.

As a result, the exchange’s users can now access the SegWit addresses by clicking on the BTC (SegWit) network to transfer funds swiftly.

There are very few exchanges that offer support for both deposits and withdrawals to the SegWit Bitcoin address and Binance has become one of them.

Deposits and Withdrawals Now Offered

Many other exchanges offer either deposits or withdrawals from the SegWit Bitcoin address.

Based on the announcement, users are asked to make sure they are transferring compatible assets into the correct addresses before any transactions. That’s because if done otherwise, the funds may not be recovered.

“Please note […] if you incorrectly send incompatible assets to the address, your funds will not be recoverable and will result in permanent loss,” the Binance statement reads.

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SegWit Provides Bitcoin Scalability

SegWit was implemented in 2017 as a Bitcoin protocol to fix network bugs and scale the network.

The protocol upgrades data on the blockchain in a unique way. It segregates signatures from transaction data, allowing more room for storing transactions in a single block, which increases transaction capacity.

With such segregation, it ensures that Bitcoin transaction fees are less expensive and faster at the same time. This improves the scalability of the Bitcoin network.

According to data gathered by Transactions.info, 70% of Bitcoin payments use the SegWit protocol. The idea is to help solve the scalability issues with Bitcoin, even though the top cryptocurrency is seen as is a secure monetary instrument for storing value. But with the use of SegWit, such scalability issues can be controlled.

However, unlike the SegWit protocol, the Lightning Network has been very useful as a feasible layer 2 scaling solution. It is not like SegWit which is seen as a soft fork update to Bitcoin’s protocol. It serves as an extra layer that can offer low-cost and speedy transactions.

Even with the limited transaction capacity issue with Bitcoin, the cryptocurrency is still very dominant in the market. As a result, most protocols, such as SegWit, are designed to help scale the Bitcoin blockchain and improve transaction capacity.