Only a third of exchanges adopted the Bitcoin SegWit update
|Slavomír Kaňuk|source|9353x
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Only a third of exchanges adopted the Bitcoin SegWit update

SegWit (Segregated Witness) extends the BTC protocol and was activated in August 2017. The primary reason for launching this extension is to increase the scalability of the bitcoin blockchain. In simplicity, SegWit helps the bitcoin network with faster and cheaper processing of users transactions. Before its introduction, the BTC network often encountered problems, especially network congestion. SegWit focuses on two key variables - it brings smaller transactions and larger blocks. It ensures that more transactions fit into each block, thus increasing the overall throughput of the bitcoin network.

The largest consumers of BTC blocks are crypto exchanges, which consume up to 40% of all extracted blocks. Only the Binance and Coinbase exchanges stand for the consumption of 25% of all BTC blocks. Therefore, the analytical company Glassnode examined the adoption of SegWit by the largest crypto exchanges, which can thus contribute to improving the overall performance of the BTC network. In its survey, BTC evaluated in and out transactions. The study results are pretty surprising, and most crypto exchanges do not seem to be very interested in SegWit.

 

Glassnode took a closer look at 18 crypto exchanges and found that only 6 of them fully accepted the SegWit update, which is more than four years old. There was more than enough time to implement the update into the exchange infrastructure. The study's biggest surprise is probably Binance, which is itself responsible for filling 15% of all BTC blocks. SegWit utilization on this exchange is only 10% (at the end of 2021), which is really inadequate for one of the market leaders. Although this number has risen to 50% recently, Binance still has a long way to go.


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Glassnode study divided exchanges according to the adoption of the SegWit update into three categories: Pioneers (with an acceptance of more than 90%), Stragglers (with an acceptance between 20% - 90%) and Holdouts (with an acceptance of less than 20%). The FTX, Kucoin, Coinbase, Luno, Kraken and Bitstamp exchanges ranked in the best group. The great news is that one of the largest exchanges, Coinbase is one of the top exchanges in this area, consuming up to 10% of all BTC blocks. With an acceptance of 20% to 90%, the middle group includes Gemini, Hibtc, Coincheck, BitMEX, Bitfinex and Binance. The worst exchanges in terms of SegWit adoption include Okex, Bithumb, Bittrex, Huobi, Poloniex and Gate.io.


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In the last category with a low adoption rate of SegWit, only the Okex exchange attempted its at least minimal acceptance (7%). The approach of the exchange market giants is quite striking, as the use of SegWit makes the bitcoin protocol much more accessible to all users. The exchanges thus clearly signal a lack of interest in upgrading their infrastructure at the expense of the entire network and show that they are only interested in their own profits.

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