Bitcoin seems to have resumed its upward run from the historical lows reached this year and seems unstoppable again. For this reason, governments, software houses and others are updating their applications to take advantage of these new trends and make the exchange of Bitcoins even more profitable. This is also the case with BitMEX as we will see specifically in this article. Don't you know what it is? Then you just have to keep reading!

BitMEX recently announced its support for withdrawing Bitcoin in the Bech32 format (native SegWit). The update is already effective. But how will this update affect users?

Support for the Bech32 address

Starting today, BitMEX users will be able to withdraw Bitcoins in three address formats. This means that the address to which Bitcoin is withdrawn can also be in the Bech32 format.

Deposits, however, will continue to remain in Pay to Script Hash (P2SH) addresses due to the exchange's multi-signature portfolio solution.

This update is part of BitMEX's ongoing commitment to optimize its Bitcoin portfolio infrastructure and technology, in order to reduce the use of heavyweights and reduce transaction fees for its customers.

How will users benefit from this update?

For users, the update involves lower transaction costs when they spend Bitcoin which was withdrawn with Bech32 addresses. They will not save on commissions when withdrawing their Bitcoins from BitMEX, but when they spend Bitcoin withdrawn from BitMEX with a Bech32 address, in this case savings in transaction fees may occur.

The reason these savings can occur is that when users spend from a non-native address using SegWit, they have to add 20 bytes of overhead. However, when using native SegWit-style addresses (Bech32), the need for the 20 bytes of overhead is eliminated, with a consequent reduction in the size of the transaction and, therefore, in savings.

Due to the signature / script discount, the more inputs a transaction has, the greater the savings. Therefore, larger transactions, with more than one input, generate higher savings than smaller transactions.

In the blog published by BitMEX, the company also shared that their next priority for the company's portfolio, which is to enable SegWit (non-native). Updates relating to the adoption of SegWit will lead BitMEX to benefit from a heavyweight saving of around 65%.

Other exchanges with Bech32 support

Numerous other major exchanges including Kraken, Bitfinex, Bitstamp, HitBTC and Gemini have already implemented support for Bech32 addresses. Gemini is one of the few exchanges that has support for creating / receiving and support for sending Bech32.

A complete list of software wallets, hardware wallets, web wallets, exchanges, Bitcoin ATM models, blockchain miners, payment processors and other services with support for the Bech32 address format will be available on our website.