BitMEX Reissues Bitcoin Deposit Addresses to Reduce Withdrawal Fees

Blockonomics
BitMEX Reissues Bitcoin Deposit Addresses to Reduce Withdrawal Fees
Coinbase



BitMEX has made a strategic decision to enhance the utilization of Bitcoin block space and minimize withdrawal fees for its users.

In a significant update, effective November 1, 2023, BitMEX will issue new Bitcoin deposit addresses to all its customers.

BitMEX Reissues Bitcoin Deposit Addresses

BitMEX has recently unveiled a significant update aimed at optimizing the use of Bitcoin block space and reducing withdrawal fees for its users. According to an October 30 announcement, BitMEX will reissue all customer Bitcoin deposit addresses, transitioning to the more efficient pay-to-witness publish key hash (P2WPKH) Bech32 format addresses.

The change eliminates the need for complex multi-signature transactions, replacing them with single on-chain signatures, resulting in substantial block weight savings without compromising security.

Ledger

The transition will occur in phases, with new users receiving the updated addresses from November 1, 2023, and existing addresses being replaced between November 1 and November 30, 2023. Users are urged to stop using old addresses, update their address books, and whitelist the new addresses to ensure a seamless transition.

A Shift from Multisignature to Bech32 Addresses

BitMEX’s decision to reissue Bitcoin deposit addresses comes as a response to the evolving landscape of blockchain technology. The new addresses will be in the pay-to-witness publish key hash (P2WPKH) Bech32 format, commonly referred to as “bc1 addresses.” This change will see the removal of the historical “vanity” address prefix, including “3BMEX” and “bc1qmex.”

BitMEX previously used deposit addresses based on Bitcoin’s native on-chain 3 of 4 multisig system (P2WSH). This complex process required three signatures published to the blockchain for each spend from a deposit address, even with the Segregated Witness (SegWit) witness discount. As a result, it consumed a significant amount of block space.

The new wallet addresses, on the other hand, will require only a single on-chain signature (P2WPKH) for each fund transfer. This change is facilitated by a multi-party computation (MPC-CMP) using a network of highly secure and geographically distributed private keys.

Notably, this updated signature scheme is already employed for BitMEX’s hot withdrawal processing, ensuring the transition does not compromise the platform’s high-level wallet security.

Meanwhile, to enhance security, the BNB Chain has recently unveiled a new secure multi-signature wallet solution called BNB Safe, built on the Gnosis Safe protocol. It is currently accessible on both the Binance Smart Chain (BSC) and the opBNB networks.

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