A few of the major problems that users face while transacting on cryptocurrency exchange are high network fees and slow transaction speed. Cryptocurrency exchanges with large trading volumes often have too much load on their network due to which these sorts of challenges arise. However, major crypto exchange Coinbase has announced a move that is a potential solution.
Through a blog post published yesterday, the San Francisco based exchange has announced that it will batch multiple bitcoin transactions together, instead of putting through individual transactions.
The Coinbase Solution
In the blog post, Coinbase product manager Eli Haims commented, “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.”
Coinbase confirmed that the batching procedure is already in place. It also said that there will be a slight delay in the broadcasting of transactions to the network, However, Coinbase clarified that the process will not affect the users’ transaction confirmation time.
How will Batching help?
Traders and users often end up paying high transaction fees while there is congestion in the network due to a high number of transaction requests. Batching will reduce the number of individual transactions that the nodes need to process at once. This will comprehensive increase transaction speeds and reduce transaction fees.
How does the cryptocurrency scenario look at the moment?
The outbreak of the Coronavirus has taken a major hit on the global economy. It has also affected the cryptocurrency space. A large number of investors, users and traders are liquidating their holdings, thus leading to an increase in the average transaction fees. Major cryptocurrencies have also lost value in the last couple of weeks. It would be interesting to note how the crypto world recovers after this major set back.