Investors on Binance can now deposit and withdraw funds to SegWit (bech32) addresses. Binance, one of the largest cryptocurrency exchanges in the world by volume, added support for deposits with Bitcoin (BTC) via the Segregated Witness (Segregated Witness) or SegWit network.

 

Binance said in an official statement that SegWit support has been expanded to deposits on Christmas Eve. The protocol update was initially enabled for withdrawals only.

Permanent loss alert

With immediate effect, Binance users can transfer funds to a SegWit (bech32) address by selecting the BTC (SegWit) network. Binance makes the following statement on the subject:

“Please note that SegWit should help lower fares; however, if you send incompatible assets to the wrong address, your money is irrecoverable and will result in permanent loss. “

SegWit, implemented in 2017, is a Bitcoin protocol update designed to help scale the network and fix related bugs. SegWit is known for updating data in the blockchain, that is, by separating signatures from transaction data. This protocol update increases transaction capacity by allowing more transactions to be stored in a single block.

Scalability

Data from Transactionfee.info shows that about two-thirds of Bitcoin payments are currently made using SegWit. Even though Bitcoin emerged as a monetary tool for storing value, it continues to face scalability limitations that some claim hinder adoption for everyday use.

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Lightning Network was offered as a layer 2 scaling solution suitable for Bitcoin as a payment protocol. Unlike SegWit, which is a soft fork update of the Bitcoin protocol, the Lightning Network is an additional layer that allows for immediate, lower-cost transactions.

Despite its limited transaction capacity, Bitcoin remains the de facto leader of the digital currency market. According to CoinMarketCap, Bitcoin’s dominance at the time of writing is 68.7%.

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