Crypto exchange BitMEX has hinted that it will soon start using the Blockstream Liquid Sidechain technology in order to lower the impact on the Bitcoin mempool thus lowering the fees. Following the latest developments, we read more about the plan in the coming altcoin news below.
After a discussion on social media was initiated by the CEO of Bitrefill Sergey Kotliar about how crypto exchanges all have high fees for bitcoin users and the staff pointed out that developers are now testing solutions for this problem. It turns out that the larger part of the BitMEX volume is always a controversy from the settlement activities because of the high number of transactions that are generated from Bitcoin withdrawals and other processes.
The more transactions there are and the larger the numbers of them are released on the network, the quicker the transaction fee will rise. Increases in the average fee rate for Bitcoin could potentially become a problem for all those who are sending transactions for many hours later.
Some crypto exchanges are already considering further steps to reduce the number of outputs they generate and by that to contribute less to the size of the mempool. Also, the Segregated Witness (SegWit) technology saw a really good uptake in 2018 and now the crypto exchange BitMEX confirmed that they are looking to implement it. This will ‘’batch’’ the transactions and will create less work for the entire network. The staff of the exchange wrote:
“We have SegWit in testing but it is bundled with some other backend upgrades to systems that will allow us to monitor many more addresses and rotate them more freely.’’
As reported in the latest cryptocurrency news, the Liquid sidechain forms a special network that is pegged to Bitcoin which will allow exchange transactions to settle in a predefined period. BitMEX stated that its internal protocols are requiring a more mempool-intensive approach:
“There can only be one batch release, because we (still) manually review withdrawals and process them by hand.’’
In the industry, the major US trading platform Coinbase and wallet provider blockchain.com are still the ones keeping the users away one because Coinbase cannot adopt batching and blockchain refuses to implement the SegWit compatibility.