Coinbase – one of the largest and most popular cryptocurrency exchanges in the United States – says it will start grouping bitcoin transactions together, rather than processing them separately.Coinbase Has Decided to Start BatchingThe process – known as “batching” – is designed to prevent high levels of traffic on the blockchain and keep transaction speeds reasonable. The process is also made to ensure users’ transaction fees remain low.In a blog post, the trading platform writes:Historically, every time a Coinbase customer sent bitcoin, we broadcasted a single on-chain transaction. Starting today, we will be bundling multiple sends into a single transaction. We anticipate that this will reduce our load on the bitcoin network by more than 50 percent, and the network fees our customers pay
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Coinbase – one of the largest and most popular cryptocurrency exchanges in the United States – says it will start grouping bitcoin transactions together, rather than processing them separately.
Coinbase Has Decided to Start Batching
The process – known as “batching” – is designed to prevent high levels of traffic on the blockchain and keep transaction speeds reasonable. The process is also made to ensure users’ transaction fees remain low.
In a blog post, the trading platform writes:
Historically, every time a Coinbase customer sent bitcoin, we broadcasted a single on-chain transaction. Starting today, we will be bundling multiple sends into a single transaction. We anticipate that this will reduce our load on the bitcoin network by more than 50 percent, and the network fees our customers pay will automatically be reduced by an equivalent amount when sending. This update requires no action from customers, who will immediately see reduced network fees.
One of the big problems associated with blockchains is that they can be consumed with heavy transactions. With bitcoin and Ethereum – two of the largest and most popular blockchains in existence – this problem goes double when considering their ages and scopes. Bitcoin has had to resort to platforms such as the Lightning Network to ease up the demands being placed on its shoulders, while Ethereum is presently searching for a potential solution.
Co-founder Vitalik Buterin commented not too long ago that the Ethereum blockchain was no longer scalable thanks to growing mounds of traffic, and that transactions were subject to very high gas fees.
Batching is already underway at the time of writing. Coinbase has explained that while the transactions may not be posted to the network right away, speeds will remain consistent. Thus, users should be able to send and receive funds without any delays.
The latest coronavirus attack has caused bitcoin and several other cryptocurrencies to lose their value. This kind of market turmoil often leads to increased fees for crypto users, and Coinbase is hoping to relieve users of the financial burdens they’re likely facing by reducing fees through batching.
Trying to Lower the Fees
The blog post explains:
Like traditional payment systems, all bitcoin transactions are required to pay a network fee or a processing fee. During periods of high activity on the network, bitcoin users compete to have their transactions processed, outbidding each other via network transaction fees. This has led to days when the median network fee for a single transaction was over $30. The size of this fee rendered bitcoin impractical for low value transactions. Currently, daily median network fees on the bitcoin network are around 30 cents for a transaction.
This year has marked big change for Coinbase. The company recently joined hands with Visa to bring crypto-based debit cards to its users.