BitMEX reveals testing of SegWit implementation amidst high transaction rate fees on the exchange

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Bitcoin’s [BTC] transaction rate fees have been one of the most debated issues over the last few years, with some even categorizing it as a hurdle to Bitcoin’s accessibility to general users. In December 2017, transaction fees spiked significantly, making even the smallest of transactions on Bitcoin blockchain extremely expensive.

Sergej Kotliar, the CEO of Bitrefill, recently discussed the issue regarding transaction rate fees and suggested that such inflated rates had to be left behind. He claimed that rates would never be high again.

However, Kotliar highlighted a few instances where the rates could still be lower, however, not owing to the actions of certain exchanges.

Kotliar tweeted about the functioning of Coinbase, suggesting that the Brian Armstrong-led exchange did not batch their transactions, resulting in a lot of occupied space in the mempool being left with no benefit.

Kotliar shifted attention to BitMEX later, shedding light on a peculiar activity carried out on a daily basis.

He tweeted,

“Every day at 9.15 AM ET they dump 4 MB of just comically unoptimized withdrawal transactions. This is a big reason why fees are high during US office hours. Optimizing these to best practices would make these transactions shrink by 98%. “

Source: Twitter

Kotliar later shared a statistic, listing a “worst case scenario” where the dump was around 7MB on the exchange. The impact on the fees was clearly observed in the aforementioned chart. He added that batching was the solution which would “reduce this by 90%”, stating that the spike would not be substantial.

BitMEX responded to the issues raised by Kotliar and revealed that the exchange had initiated SegWit in testing. The exchange stated that,

“It is bundled with some other backend upgrades to systems that will allow us to monitor many more addresses and rotate them more freely.”

BitMEX also added that the exchange did not entertain collective batching because they manually reviewed withdrawals and processed them through human input. The exchange said,

“It is infeasible to do this multiple times a day. and artificially delaying the release of withdrawals would hamper the user experience.”


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Biraajmaan Tamuly

Biraajmaan is an engineering graduate who is exploring the ever-changing crypto verse while traversing his passion for cryptocurrency news writing. He is a Chelsea fan and a part-time poet and does not hold any value in cryptocurrencies yet.

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