Luno integrates SegWit to reduce fees
We are happy to announce full SegWit integration on Bitcoin send and receive transactions.
What is SegWit?
SegWit, short for Segregated Witness, is an improvement to the way Bitcoin transactions are sent. With SegWit, certain information is restructured in Bitcoin transactions, rendering them effectively smaller, which means more transactions can now fit into a block. This, in turn, should help make Bitcoin transactions faster and cheaper than what they currently are.
Note that SegWit is not the same as the proposed (and suspended) SegWit2X fork.
For a more technical description, see this.
What’s in it for me?
Cheaper and faster Bitcoin transactions!
We already implemented SegWit on Bitcoin send transactions in December 2017. This has significantly decreased the Bitcoin network fees that you pay when you send Bitcoin. By implementing SegWit internally, Luno has managed to reduce the send fees paid by customers by over 25% already. As customers start switching over to new SegWit addresses, this will translate into a further reduction in sending fees in the coming weeks and months.
Note that Bitcoin network fees fluctuate, based on blockchain congestion, so comparing fees over different time periods isn’t always straightforward.
Until recently, you could only receive Bitcoin with Luno in a non-SegWit Bitcoin wallet address (known as a legacy wallet address).
From today, you can also receive Bitcoin in your new SegWit Bitcoin wallet address on Luno. Note that the receive fee, explained here, will remain in place and that you can also send Bitcoin instantly and free of charge to anyone, by using their email address or mobile number.
What do I need to do?
To add a SegWit wallet address:
- Navigate to your Luno account (mobile app or web)
- Select Wallets from the menu
- Select your BTC wallet
- Select Receive Bitcoin
- Select Add address and follow the instructions
Now, when you want to receive Bitcoin, you should use your SegWit Bitcoin receive address. Legacy Bitcoin addresses start with a 1, whereas SegWit Bitcoin addresses start with a 3. Bitcoin sent to your old, legacy Bitcoin address will still work.
Note: You can send Bitcoin from a legacy wallet to a SegWit wallet (and vice versa) — it is still done on the same Bitcoin blockchain. It’s just if you’re sending to and from a SegWit-compatible wallet, you may enjoy a reduction in fees.
We’d like to thank you for your patience. We planned on launching SegWit much earlier, but with the price, interest, transactions and new customer registrations reaching incredible peaks over the past two months, we had to apply all our resources to ensure site reliability and faster response times.
We’re on a journey to upgrade the world to a better financial system and this is one more milestone on the way there. We’d like to thank you for choosing us as your guide to this new frontier and we’re committed to bringing you more improvements and updates as we travel there together.
Watch this space.