Coinbase Inc., the largest U.S. cryptocurrency exchange, is planning to roll out a long-awaited software update in an effort to reduce transaction fees customers pay when sending Bitcoin.
The upgrade, called Segregated Witness or SegWit, was first made available by developers in August as Bitcoin’s growing popularity led to congestion in the network. Coinbase said in a tweet Tuesday that it will begin a phased rollout this week, and expects to launch the change for all customers by the middle of next week.
SegWit aims to make transactions faster by taking some of the work off the main network. The San Francisco-based exchange has received an influx of complaints about inefficiency and high transaction charges, and told customers in December that any change to its infrastructure would take time.
“We store billions of dollars worth of Bitcoin on behalf of customers and any change to our infrastructure is done with significant planning and consideration for the security and stability of our platform,” Coinbase said in a Dec. 15 blog post. “This upgrade helps reduce the size of transactions, which improves the overall transaction capacity of the Bitcoin network. This upgrade should also help reduce the fees customers pay on bitcoin transactions.”
Coinbase warned users last week that once the upgrade is activated, they will no longer be able to recover funds if they incorrectly send Bitcoin Cash to a Bitcoin address. Bitcoin Cash is the cryptocurrency that split off from Bitcoin in August amid disagreements over how to make the network more efficient.