Trading bitcoin, the world’s largest cryptocurrency by market capitalization, could become cheaper and faster, thanks to new software employed by two major exchanges for buying and selling the digital currency. (See also: Be Wary of Cryptocurrencies: Ethereum Founder.)
This week, both Coinbase and Bitfinex announced plans to adopt a software called Segregated Witness, or SegWit, which bitcoin enthusiasts and the latter exchange says should reduce fees by as much as 20% and cut transaction wait times.
Bitcoin bears have often pointed to the cryptocurrency’s long transaction times, often more than 24 hours, as barring it from becoming a viable means of means of payment for goods and services. Over the past few months, bitcoin transaction fees have soared to over $20, frustrating existing users and keeping out more cost-conscious investors. The sharp rise in fees and an inability to compromise on blockchain size increases were reasons for the "forking" of bitcoin this summer with the creation of the new cryptocurrency called bitcoin cash, reports CNBC. SegWit will slightly increase the block size, allowing more transactions to fit into each block, thus speeding up transaction times.
Crypto Bulls Upbeat
"The most noticeable changes in the short term should be more efficiency when transacting," said Alex Sunnarborg, a founding partner at hedge fund Tetras Capital, to CNBC.com. "SegWit adoption is undoubtedly positive for bitcoin as it greatly impacts transaction fees, speed, and future tech possibilities, all areas in which alternative crypto assets like Bitcoin Cash and Ethereum compete with and often criticize bitcoin on."
Bitfinex, with accounts for about 38% of all U.S. dollar-bitcoin trading volume according to CrytpCompare, announced the rollout on Tuesday. Silicon Valley-based Coinbase, which facilitates 17% of U.S. dollar bitcoin trading volume, also announced the software update this week, indicating that it should be fully available by the middle of next week.
After reaching an all-time high around $20,000 late in 2017, bitcoin plummeted near $6,000 earlier this year, recovering just above $10,000 as of Friday morning. (See also: Bitcoin Will Hit $320,000: Winkelvoss Twins.)
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