Coinbase, a cryptocurrency exchange based in San Francisco, has begun grouping together multiple bitcoin transactions, rather than sending one by one issue.
Adopting “batching,” the firm said Thursday in a blog post, will mean putting less strain on the Bitcoin blockchain from large numbers of transactions arising from the popular exchange. According to the post, the move will further cut transaction fees for customers.
“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,” wrote Eli Haims, Coinbase product manager.
Batching is already live, with the firm warning that it will add a “small delay” in transmitting to the network, but will not affect the amount of time it takes to confirm user transactions.
Change will Take Effect by Reducing Number of Transactions
The change will have its effect by reducing the number of transactions that the numerous, but still limited, numbers of computers that support the network need to process. Bitcoin can become congested in times of high use, with users having to pay higher fees to get their transactions verified.
Historically, when the price of bitcoin peaks, the market gets busier and fees often rise in conjunction. Fees since last year were stable and relatively low, but peaked to record levels as bitcoin rose to an all-time high in late 2017.
Notably, the recent turmoil in the markets prompted by the potential hit of the coronavirus on the global economy has seen a sharp rise in fees, apparently as investors and traders have moved to liquidate their holdings in large numbers.
On average, transaction fees over the last five weeks were around 74 U.S. cents, according to data from Byte Tree shared in a tweet, but an hourly average sometime Thursday saw that climb to nearly $2 on average.