GDAX (Global Digital Assets Exchange), Coinbase’s very own cryptocurrency trading platform that allows users to trade most of the altcoins in the market, just announced that it is now supporting Segregated Witness (SegWit) transactions on the Bitcoin network.

In a blog post, the GDAX team revealed that over the next few days, all of its users will be able to benefit from SegWit and the perks that come with it. They also acknowledged the importance of SegWit and the how much it helps Bitcoin in terms of scalability.

“Over the coming days, full support for SegWit transactions will be rolling out to 100% of our customers. SegWit is a critical step forward in the development of Bitcoin and we are thrilled to support it on GDAX.”

SegWit 101

The concept of Segregated Witness might seem daunting and overly-sophisticated at first, but in reality, it is fairly easy to comprehend.

SegWit, along with the highly-acclaimed Lightning Network (LN), are upgrades to Bitcoin that aim to solve Bitcoin’s scaling issues and make transactions more cost- and time-efficient. The SegWit protocol also helps increase the security of the transactions that are being made by separating (segregating) the main part of the transaction data from the part which authorizes the transaction (witness). This also helps reduce the individual block size, thus making the Bitcoin network much more scalable than it is right now.

Fun fact: SegWit is actually a soft fork, which is a backward compatible code change that has been implemented on some cryptocurrencies such as Litecoin.

One of the reasons for the soft fork was because of Bitcoin’s absurdly high transaction fees, which stemmed from the limitations of a blockchain. SegWit sets out to solve exactly that.

Below are the nitty-gritty details about SegWit, as seen on

The transaction data is split using SegWit. This makes it possible to only store necessary transaction data on the blockchain. With transactions requiring less information be included on-chain, more of them can fit into each block. This, in turn, reduces the need for users to increase their transaction fees. Previously, when the blockchain was full, users would be required to use a large fee if they wanted the network to validate their transaction before others also waiting. This forced users to continually increase their fees until they reached the point where some declared the network as broken. 

The effects of the incorporation of both SegWit and the Lightning Network is evident. Already, the network/mining fees required to send Bitcoin has been dropping drastically. In fact, ever since Coinbase and Bitfinex announced that they have implemented SegWit transactions, the transaction (modern) fees on the Bitcoin network have fallen to historic lows.

In other words, SegWit aims to mitigate congestion on the Bitcoin network and hopefully help Bitcoin live up to the vision of its creator Satoshi Nakamoto – as an efficient, peer-to-peer electronic cash transfer system.