San Francisco based digital currency exchange, Coinbase announced the addition of the Bitcoin transaction batching feature to its platform.
Based on reports, the new feature from Coinbase allows batching multiple transactions into one. This helps in reducing the load on the Bitcoin network. Therefore, the lower the load, the more block space, and lower transaction fees.
A post by Coinbase said: “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.”
“We anticipate that this will reduce our load on the Bitcoin network by more than 50%, and the network fees our customers pay will automatically be reduced by an equivalent amount when sending,” the post added.
Besides, the digital exchange platform explained that the feature will reduce their load on the Bitcoin network by more than 50%. Also, they claim the network fees customers pay get automatically reduced by an equivalent amount when sending.
The update requires no effort from customers, as they get to see reduced network fees instantly. However, the exchange explained that the release will introduce a small delay in a transaction being broadcast to the network, but this won’t impact the time it takes for transactions to be confirmed at the normal rate for customers.
How does this work?
The Bitcoin network processes transactions by packaging them into blocks and adding these blocks to the end of the blockchain. Every single block carries a fixed capacity (in bytes), and one is created every 10 minutes on the average. This limited supply of block space and increasing demand for transaction processing leads to high fees.
A single transaction that fulfills multiple users sends requests occupies less space in each block than each being processed individually. In other words, the whole is less than the sum of the parts when it comes to Bitcoin transactions.
Additionally, Coinbase believes that with this innovation they’ll be able to improve the BTC protocol in order to facilitate scalability and reduce processing time. Also, general Bitcoin network fees will be fairer if transactions were to be executed in a timely fashion.
Coinbase also revealed that the new feature will be rolled out for both Coinbase and Coinbase Pro platforms.
Criticism at Coinbase BTC Batching
The innovation by Coinbase attracted critical reactions from users and stakeholders.
Some believed the project should’ve been launched in 2018. A Twitter user said: “Did you forget to automatically publish this in 2016? It’s 2020 now, you know?”
Did you forget to automatically publish this in 2016? It's 2020 now, you know?
— JB – Mises not Marx (@KryptykHex) March 12, 2020
Another set of criticism states that Bitcoin transaction fees are currently already lower. This means the feature could have been more useful if launched earlier.
Omfg. Imagine being proud of rolling out tx batching 2.5 years after the fee crunch. https://t.co/PpgSlwKprg
— BTC Sessions 😎 (@BTCsessions) March 12, 2020
The average transaction fees on the Bitcoin network reportedly stands at $0.30 per transaction.