We are excited to announce that GDAX now supports Segregated Witness (SegWit) transactions on the Bitcoin network. 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.
What is SegWit?
Segregated Witness — more commonly known as SegWit — is an upgrade to Bitcoin that makes transactions more secure and efficient. By separating (segregating) the main part of the transaction data from the part which authorizes the transaction (witness), the entire transaction becomes more secure. This change also reduces the size of individual transactions which greatly improves the total capacity of the Bitcoin network.
SegWit unlocks many exciting possibilities for future development on the Bitcoin network. New technologies, like the Lightning Network, have the potential to significantly increase the usefulness of Bitcoin as a payment network.
Depositing and Withdrawing on GDAX
The SegWit address format used by GDAX was designed to be fully compatible with all traditional Bitcoin addresses. When sending Bitcoin from GDAX to an external address, we will automatically send your transaction using SegWit. Because SegWit is backwards compatible with previous Bitcoin addresses, you can safely send transactions from GDAX to any external Bitcoin address or wallet.
When depositing Bitcoin into your GDAX account from an external source, we will provide a SegWit address. This address is compatible with BTC wallets.
One important change is that SegWit addresses no longer share the same format as Bitcoin Cash (BCH). As a result, any Bitcoin Cash (BCH) sent to a Bitcoin (BTC) address will result in permanent loss of funds. To remind customers to not send BCH to a BTC address, the following warning will be displayed on the BTC deposit screen.
For a detailed understanding of how GDAX uses SegWit addresses for deposits and withdrawals please see our FAQ.
Looking forward — transaction batching, improved UTXO management and Lightning Network.
SegWit is an important step in scaling the Bitcoin network. We are continuing to invest in our Bitcoin infrastructure and we will be working on implementing additional Bitcoin scalability improvements like transaction batching and improved UTXO management. We hope this will all result in lower fees for customers and more capacity on the Bitcoin network.
Finally, we remain excited about the future of Bitcoin that SegWit enables. We currently have a dedicated full-time software engineer working on open source contributions to the Lightning Network.
If you are interested in working on Bitcoin infrastructure or open source digital currency protocols like Lightning, we are hiring in San Francisco, New York and London.