Top Exchanges Slash Bitcoin Transaction Fees as SegWit Adoption Spreads

Bitcoin transaction fees have been slashed across the market this week across a range of exchanges as SegWit adoption increases, dramatically improving transaction speeds and lowering costs. Bitfinex, and Binance,have all announced a reduction in Bitcoin withdrawal fees.

The recent release of the Bitcoin 0.16 software included implementation of full SegWit support in user interfaces, paving the way for widespread adoption of the optimization solution. Popular cryptocurrency brokerage Coinbase was one of the first platforms to announce SegWit adoption, Vice President Dan Romero stating that the platform will also focus on implementing second-layer scaling solutions such as the Lightning Network ::

New technologies which require SegWit, like the Lightning Network, have the potential to significantly increase the usefulness of Bitcoin as a payment network and benefit customers. We currently have a dedicated full-time software engineer working on open source contributions to the Lightning Network.

High volume cryptocurrency exchange Bitfinex was quick to follow in adopting the SegWit solution,

Exchanges Drop Fees as a Direct Impact of SegWit Implementation
Bitfinex, one of the largest cryptocurrency exchanges in the global market, announced earlier this week that Bitcoin transaction fees would be subject to an immediate reduction following the implementation of SegWit, stating that fees would be lowered by 25%.

As Bitfinex accounts for more than $680 million USD in daily trade volume, it exerts a powerful influence on other exchanges. Bitfinex’s announcement was quickly followed by an announcement from Binance, which accounts for roughly $1.4 billion in daily volume, who have reduced their fees by a competitive 50%.

Popular exchange platform Kraken followed suit later the same day, announcing that Bitcoin withdrawal fees would be reduced to 0.0005 BTC, while smaller exchange Nanex, not to be outdone, announced a fee reduction of 75%.

Lightning Network Concerns
Bitcoin transaction fees and speeds are set to be improved greatly by the impending Lightning Network scaling layer, which promises transaction speeds of up to one million per second. Not all industry observers are in favor of the Lightning Network solution, however — Bitcoin developer Peter Todd has expressed concerns regarding the implementation of the layer, citing potential security issues:

As for the Lightning protocol, I’m willing to predict it’ll prove to be vulnerable to DoS attacks in it’s current incarnation, both at the P2P and blockchain level. While bad politics, focusing on centralized hub-and-spoke payment channels first would have been much simpler

Regardless of the future impact of the Lightning Network solution, the recent implementation of SegWit is ultimately good news for cryptocurrency investors who are capitalizing on the reduction in fees and faster transaction speeds, driving the value of BTC up by 10.85% in the last 7 days.