BitMEX, the Seychelles-based cryptocurrency exchange, has announced a significant change to its deposit (BTC) address format. Starting November 1, 2023, BitMEX will implement the Payment-to-Witness Public Key Hash (P2WPKH) format, also known as Native Segregated Witness (SegWit) with a bc1 prefix, for all Bitcoin deposit addresses client. This change aims to optimize the use of Bitcoin block space and minimize withdrawal fees.
The new system replaces complex multi-signature transactions with unique on-chain signatures. This transition is facilitated by multi-party calculation (MPC-CMP) using a network of secure and geographically distributed private keys. This eliminates the need for three signatures for each expense from a filing address, even accounting for the discount for separate witnesses.
BitMEX’s transition to the P2WPKH Bech32 format, also known as “bc1 addresses”, is already applied in the processing of hot withdrawals from the exchange. The updated signature system ensures robust wallet security while aiming to reduce withdrawal fees and improve Bitcoin block space utilization.
The exchange warned that occasional delays in processing deposits or withdrawals may occur due to this transition. Starting January 1, 2024, BitMEX will stop crediting funds sent to old addresses in real time and will periodically interact with these addresses. The exchange advises users to update their wallet addresses in other services’ address books.
This move by BitMEX mirrors similar moves by other exchanges such as Binance. Binance has deactivated legacy deposit addresses for (ETH) and TRON (TRX) as part of an infrastructure upgrade in April 2023. In line with enhanced security measures, Binance has also launched BNB Safe, a solution secure multi-signature wallet on the Gnosis Safe protocol for Binance Smart Chain (BSC) and opBNB Networks.