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ShapeShift Integrates SegWit: Rapid Scaling of Bitcoin and Decreasing Fees

ShapeShift Integrates SegWit: Rapid Scaling of Bitcoin and Decreasing Fees

ShapeShift Integrates SegWit: Rapid Scaling of Bitcoin and Decreasing Fees

ShapeShift, a popular instantaneous cryptocurrency trading platform, has officially integrated the Bitcoin Core development team’s transaction malleability fix and scaling solution Segregated Witness (SegWit).

Erik Voorhees, the founder and CEO of ShapeShift, revealed that the integration of SegWit allows users on the platform to experience substantial decrease in transaction fees and shortened transaction verification periods. Voorhees wrote:

“[Integration of SegWit means] lower mining fees for ShapeShift users buying or selling Bitcoin and less data per transaction (increasing scale capacity of network). We look forward to further adoption of SegWit on the Bitcoin network, and strongly encourage other companies to integrate it into their software. We also want to give Pieter Wuille considerable credit for originally designing and proposing Segregated Witness, one of the Bitcoin protocol’s most important upgrades.”

Over the past two years, ShapeShift has demonstrated an exponential growth rate and an increase in trading volumes. Voorhees emphasized that ShapeShift currently accounts for 2 to 3 percent of all Bitcoin transactions, due to its growing popularity amongst cryptocurrency traders. For alternative cryptocurrency (altcoin) trading, ShapeShift is likely the most secure and efficient trading platform for investors because of its transparency and elimination of Know Your Customer (KYC) systems.

Already, seven percent of all Bitcoin transactions within the network are SegWit-enabled. That means, a relatively large portion of users have started to experience a substantial deduction in transaction fees and reduced verification periods. More importantly, an increase in the number of SegWit transactions would result in faster adoption of SegWit because Bitcoin wallets or recipients that receive SegWit-enabled transactions can automatically start dealing with SegWit transactions.

Many Bitcoin wallets and exchanges have still not adopted SegWit. Specifically, Coinbase and Blockchain, the two largest Bitcoin wallet platforms with over 40 million combined users, have not integrated SegWit as of yet. But, as major trading platforms and wallets like ShapeShift, Trezor, and Ledger continue to adopt SegWit, the transaction fees of Bitcoin and the network’s congestion will decrease at a rapid rate.

Earlier this year, the Ledger development team disclosed that the usage of SegWit-enabled transactions could result in 35 percent reduction in transaction fees.

“Segwit introduces the concept of block weight which changes the way the transaction size is computed by splitting the signatures in a different area — you can typically save 35% of the fee paid when sending a transaction immediately,” wrote the Ledger team.

More importantly, Ledger developers explained that SegWit leads to a 60 percent time optimization in signing transactions, adding security measures to hardware wallets. The team added:

“When computing a Segwit signature, the previous transactions do not need to be processed by the device, and each input is only processed once during the signature process, leading up to a 60% time optimization in the signature process.”

As the adoption rate of SegWit surpasses 10 percent and eventually to over 80 percent, the average Bitcoin block size, transaction fees, and confirmation times will decrease drastically, effectively scaling the Bitcoin network.

Author : 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.

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