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Coinbase is Deploying CPFP to Save Bitcoin Transactions That Were Stuck

Coinbase

On 2nd of October, 2018 Coinbase announced that they are going to deploy CPFP (child pays for parent) to push Bitcoin transactions that are stuck because of the volatility in fees. Usually, when Bitcoin transactions are conducted, there are so many situations when the fees of the transaction suddenly rise. In such situations, the Bitcoin with low transaction fee will be pushed down whereas a Bitcoin transaction with high fees will be forwarded.

This is the reason why Coinbase is planning to deploy CPFP, which solves the issue and provides a better experience for users. Bitcoin transactions are not particularly fixed, they keep on varying from time to time. The highest bidder’s transactions are processed, whereas the lowest bidders have to wait until the transaction fee is decreased. This way the lowest fee coin has to wait for a lot of time in order to get the transaction confirmed.

If keenly observed one can notice that most Bitcoin transactions have a change of output that means the amount of Bitcoins that have been sent are different from the amount of Bitcoins that are received. Bitcoin change will be sent to the original wallet. This change will be used in the CPFP process. By using CPFP, another transaction is broadcasted which is in connection with the original transaction. For this CPFP transaction, the change left in the Bitcoin wallet is used. The second transaction is considered as child transaction whereas the first transaction is considered as the parent transaction.  The child transaction should not be approved before the parent transaction and both of them can be approved at once as the miners will recognize the CPFP association. Bitcoin mining software creates groups of parent and child transactions together to increase the fees.

If the child transaction fee is a little bit more than the parent transaction fee, then the transaction gets approved without any hassle. Coinbase uses this CPFP technique if the transaction has been on pending list since forty minutes which means after four blocks. Other crypto exchanges in the market are interested to adopt the CPFP technique.

Coinbase has stated that with the help of this CPFP technique they have saved thousands of stuck Bitcoin transactions in the past few months. Bitcoin users who have their own wallets and have control over their own keys can perform this CPFP on their own.

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