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  • Cryptocurrency exchange Coinbase said it has saved its customers 75% in transaction fees by batching bitcoin transactions since early 2020, according to a blog post.

    Coinbase is a digital currency exchange headquartered in San Francisco, California. Coinbase has two core products: a Global Digital Asset Exchange (GDAX) for trading a variety of digital assets on its professional asset trading platform, and a user-facing retail broker of Bitcoin, Bitcoin Cash, Ether, Ethereum Classic, and Litecoin for fiat currency. It also offers an API for developers and merchants to build applications and accept payments in both digital currencies.

    This announcement comes months after the exchange rolled out Bitcoin transaction batching on both Coinbase and Coinbase Pro, batching all bitcoin send requests on the platforms.

    The feature reduces the load on the Bitcoin blockchain network by bundling multiple customer send requests into one transaction, rather than creating a new transaction for each request. This leads to a notable reduction in transaction fees. According to Coinbase, 100% of these savings go directly to the customers.

    The costs are reduced both because the fees paid to move the funds are contained to one transaction with multiple outputs, and because reducing the number of transactions being broadcast onto the Bitcoin blockchain better uses the available block space – of little over 1 MB per block – and reduces competition, reducing transaction fees for each bitcoiners.

    Coinbase added that batching bitcoin transactions also helped reduce fee volatility, as during high activity periods transaction fees don’t surge as much. The exchange saw the amount of transactions it was generating per day drop by 95% too.

    Coinbase batches transactions per day based on the quantity of requests it receives from customers, and revealed this is happening “at least once per minute.” Its conservative estimate, it added, suggests its move to batch transactions “contributed to a 10–15% reduction in the number of confirmed transactions per day on the entire network.”

     

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