Hong Kong cryptocurrency exchange Binance has announced that it has reduced its bitcoin withdrawal fees by 50 percent, which was followed by San Francisco crypto exchange Kraken.
Yesterday, Binance, which has a daily trading volume of $1.9 billion, took to social media to say:
“#Binance is happy to announce a 50% reduction in $BTC withdrawal fees. Effective immediately, BTC withdrawal fees are only 0.0005 BTC!”
Shortly afterwards Kraken, which has a daily trading volume of $280 million, confirmed the same thing on Twitter, stating:
“Effective immediately, withdrawal fees on Bitcoin (XBT) are reduced to 0.0005, and withdrawal fees on Bitcoin Cash (BCH) are reduced to 0.0001.”
It’s thought that the reduction in withdrawal fees is down to the increasing adoption of Segregated Witness (SegWit). Last month, it was reported that Coinbase and Bitfinex, two of the biggest digital currency exchanges, had made the move of adopting SegWit. Major notable changes that the software will bring is a reduction in transaction fees and speed, according to Dan Romero, vice president and general manager of Coinbase.
In a blog post, he said that the company is excited about the potential that SegWit will bring, adding:
“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.”
Last year, the proposed upgrade SegWit2x was called off after it lost widespread support. However, with enthusiasts unsure of the best way to improve that network’s efficiency, the last few months have seen transaction fees rise to over $20. As a result of the frustration at the cost involved, some users forked the network, creating an alternative cryptocurrency known as bitcoin cash last year. Notably, though, with SegWit it slightly increases the block size, helping to increase the number of transaction on each block, and processing transactions faster.
It’s hoped that with more crypto exchanges adopting SegWit to process transactions quickly, it will reduce the amount of transaction fees that many users currently face. This, of course, would be a short-term solution. As interest in the market continues and more new investors enter the space each day, transaction fees could, ultimately, go up again. Much still needs to be done, but it looks as though the network is going in the right direction, which can only be a good thing for the development of the ecosystem.
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