Coinbase launches bitcoin transaction batching that could help users enjoy 50% off on network fees
Sat, 14 Mar 2020, 08:39 am UTC
Digital currency exchange Coinbase rolls out a new feature that will help its users save more when using the platform.
“Today we’re launching Bitcoin transaction batching, a new feature that significantly reduces the load that Coinbase puts on the Bitcoin blockchain and may save users more than 50% on network fees,” Coinbase wrote on its blog.
“A single transaction that fulfills multiple user send requests occupies less space in each block than each being processed individually. Put another way: the whole is less than the sum of the parts when it comes to Bitcoin transactions.”
Initially, Coinbase customers only send single on-chain transactions, but starting today it will bundle multiple sends into a single transaction which will reduce the load on the bitcoin network by over 50%, as a result, the network fees paid by customers will automatically be reduced by an equivalent amount when sending.
The bitcoin network processes every transaction by packaging them into blocks and adding those blocks to the end of the blockchain. Each of the blocks has a fixed capacity and one is created every 10 minutes on average. The high fees are caused by limited supply of block space and increasing demand for transaction processing.
Good news, customers do not need to do anything to enjoy the new feature because the reduced network fees will be visible when customers make transactions. However, the release may cause a small delay in a transaction being broadcast to the network but it will not impact the time it takes for transactions to be confirmed at the normal rate for customers.
“Supporting transaction batching is one way that Coinbase can help make Bitcoin more usable by lowering network fees overall and freeing up space on the blockchain. This enables the network to increase transaction throughput, and helps to increase scalability,” Coinbase added.
Meanwhile, crypto exchange Binance has increased the Ether (ETH) withdrawal fees and customers are not happy with the changes. Many reacted with dismay calling the move a “scam” and “robbery.” Binance said that it was just a temporary adjustment due to a “period of high congestion.”
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