Bitstamp has announced full support for SegWit bitcoin transfers that would allow its users to withdraw BTC to bech32 addresses and generate new deposit addresses when using this format.
Crypto exchange BitStamp was one of the first ones to support the SegWit update in 2017 when it was implemented.
“We’ve always supported the development of new technologies that can help Bitcoin reach its full potential to store and transfer any amount of value anywhere in the world quickly and cheaply,” said the exchange.
Segregated Witness or SegWit is a Bitcoin protocol upgrade which was proposed by developer Pieter Wuille to prevent transaction malleability. The update also improved the scalability of the blockchain in the process by removing the witness data.
In order to reach consensus in the crypto networks, more than half of the network nodes need to agree that a transaction is valid making scalability an issue. But SegWit solved that problem.
However, Segwit is still not supported by every entity and the current adoption rate of SegWit is just under 60%.
Now, because of this technical upgrade, BitStamp has generated new bitcoin deposit addresses for all of its customers. Although customers can choose between the old and the new format, it encourages switching to the latest bech32 address because it gives an “efficiency boost” to Bitcoin transactions.
Bech32 is specifically designed to work with SegWit technology and offers technical benefits in the form of increased efficiency by saving space on the blockchain and limiting human error when writing addresses.
These addresses also always start with “bc1” and are not case sensitive which lowers the chance of making spelling errors when writing them and accidentally sending the bitcoins to the wrong blockchain.
Furthermore, it automatically format check the addresses to make sure your bitcoins aren’t being sent to an invalid address