Seychelles-based cryptocurrency exchange, BitMEX, has announced a significant shift in its Bitcoin (BTC) deposit address format. Starting November 1, 2023, BitMEX will implement the pay-to-witness-public-key-hash (P2WPKH) format, also known as native Segregated Witness (SegWit) with a bc1 prefix, for all customer Bitcoin deposit addresses. This change aims to optimize Bitcoin block space usage and minimize withdrawal fees.
The new system replaces complex multi-signature transactions with single on-chain signatures. This transition is facilitated by a multi-party computation (MPC-CMP) using a network of secure and geographically distributed private keys. It eliminates the need for three signatures for each spend from a deposit address, even considering the Segregated Witness discount.
BitMEX's transition to the P2WPKH Bech32 format, also known as "bc1 addresses," is already applied in the exchange's hot withdrawal processing. The updated signature scheme ensures robust wallet security while aiming to reduce withdrawal fees and enhance Bitcoin block space usage.
The exchange has warned that occasional delays in processing deposits or withdrawals may occur due to this transition. Starting January 1, 2024, BitMEX will discontinue real-time crediting of funds sent to old addresses and interact with these addresses periodically. The exchange advises users to update their wallet addresses in other services' address books.
This move by BitMEX mirrors similar actions taken by other exchanges such as Binance. Binance disabled old deposit addresses for Ethereum (ETH) and TRON (TRX) as part of an infrastructure upgrade in April 2023. In line with enhancing security measures, Binance also launched BNB Safe, a secure multi-signature wallet solution on the Gnosis Safe protocol for Binance Smart Chain (BSC) and opBNB networks.
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