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BitMEX has made a strategic choice to improve the use of Bitcoin block space and lower withdrawal fees for its users.
In a notable update, starting November 1, 2023, BitMEX will provide new Bitcoin deposit addresses to all its clients.
BitMEX Reissues Bitcoin Deposit Addresses
BitMEX has recently announced a significant update focused on optimizing Bitcoin block space usage and decreasing withdrawal fees for its users. As stated in an announcement on October 30, BitMEX will reissue all customer Bitcoin deposit addresses, moving to the more efficient pay-to-witness public key hash (P2WPKH) Bech32 format addresses.
This modification removes the necessity for intricate multi-signature transactions, substituting them with single on-chain signatures, leading to considerable block weight reductions without sacrificing security.
The transition will take place in stages, 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 encouraged to cease using old addresses, update their address books, and whitelist the new addresses to ensure a smooth transition.
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A Shift from Multisignature to Bech32 Addresses
BitMEX’s choice to reissue Bitcoin deposit addresses is a response to the changing landscape of blockchain technology. The new addresses will be in the pay-to-witness public key hash (P2WPKH) Bech32 format, commonly known as “bc1 addresses.” This update will eliminate the traditional “vanity” address prefixes, such as “3BMEX” and “bc1qmex.”
Previously, BitMEX utilized deposit addresses based on Bitcoin’s native on-chain 3 of 4 multisig system (P2WSH). This complicated process required three signatures to be published to the blockchain for each transaction from a deposit address, even with the Segregated Witness (SegWit) witness discount. Consequently, it occupied a significant amount of block space.
In contrast, the new wallet addresses will only need a single on-chain signature (P2WPKH) for each fund transfer. This change is enabled by a multi-party computation (MPC-CMP) that employs a network of highly secure and geographically distributed private keys.
Importantly, this updated signature scheme is already in use for BitMEX’s hot withdrawal processing, ensuring that the transition does not compromise the platform’s high-level wallet security.
Meanwhile, to bolster security, the BNB Chain has recently introduced a new secure multi-signature wallet solution named BNB Safe, built on the Gnosis Safe protocol. It is currently available on both the Binance Smart Chain (BSC) and the opBNB networks.
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