US-based based crypto exchange Coinbase has revealed that batching bitcoin payment transactions benefited its customers and also helped improve its internal operations.
Coinbase had launched Bitcoin (BTC) transaction batching in March 2020.
“Since launching, we have batched 100% of Coinbase Consumer and Coinbase Pro customers send requests for Bitcoin. Over this time, we’ve realized 75.2% savings in transaction fees and have passed all of those savings on to our customers. We’ve also reduced our daily transaction count by 95%.”
Coinbase Blog Excerpt
The transaction batching process involves packaging up several or multiple customers send requests into just one transaction, instead of conducting a separate transaction for each request.
Coinbase reveals that it has been able to reduce the overhead cost of transactions across multiple send requests, which lowers the “effective transaction fee per request.” This approach reduces the load on the overall Bitcoin (BTC) blockchain network because every new block has limited space available and batching lets the exchange handle more payments in a relatively smaller space.
Coinbase remarked, “Batching [has led to] a tremendous decrease in the overall transaction count that we generate per day. Instead of generating n transactions for n send requests, we now effectively generate a constant number c of transactions per day for n send requests, where c is based on how often we decide to batch up payments (today this happens at least once per minute).”
The exchange claims that this method is “a win” for the company, internally, because it means the exchange’s services have to perform significantly less work to “achieve the same end result.”
Coinbase also mentioned that the change has had “a positive impact” on the overall Bitcoin (BTC) network.
The company explained:
“By issuing the same number of send requests in a smaller footprint (fewer transactions and less block space needed), we are able to be more efficient and our overall impact on the network is reduced. Conservative estimates suggest that this has contributed to a 10–15% reduction in the number of confirmed transactions per day on the entire network.”
Coinbase said that this transaction count reduction may be beneficial for the BTC network because it could help lower fees for Bitcoin users.
