Gemini, the digital currency exchange founded by Cameron and Tyler Winkelvoss, announced on Monday that it had become “the first major exchange to launch full support of SegWit”.
The exchange explained in a blog post that, as part of its efforts to upgrade the Gemini wallet, it had introduced support for SegWit addresses and transaction batching.
“As our customers may have noticed this means that SegWit addresses — which begin with bc1 — can now be used for Bitcoin deposits and withdrawals,” Gemini’s Brian KimJohnson wrote in the blog post.
The SegWit protocol update, which was activated on the Bitcoin blockchain in 2017, allows for digital signature information to be stored separately, which, in turn, allows for more transactions to be stored in a single block.
Gemini said that when it was deciding whether to to support the protocol upgrade, it was considering block space savings, as well as possible security implications.
“Specifically, native SegWit addresses work only on the Bitcoin blockchain — they do not work for other cryptocurrencies. On the other hand, however, cryptocurrencies other than bitcoin can be sent to a legacy (non-native SegWit) address, which can cause loss of funds”.
Ultimately, the benefits of embracing SegWit was what convinced the company to make the move. KimJohnson noted that as support for the technology grew throughout the industry, it would help reduce transaction fees, wait and network congestion. More importantly, such transactions also allow for the development of more advanced solutions, such as the Lightning Network.
Firmly believing that this tech “will become the standard” and that this “will create extensive benefits for all participants on the Bitcoin network”, Gemini encourages all its customers to move to using SegWit addresses.