March 28, 2024

What is transaction packaging (batching)?

What is transaction packaging (batching)?

Here is a brief overview of the concept of batching or bundling, one of the most cost-effective solutions fornetwork scaling.

Batching is a method that is used to place a large number of transactions into a single block of the Bitcoin network.Instead of carrying out several transactions, a certain number of transactions are combined into one transfer.Combining several payments into one operation gives a tangible economic effect. 

In case one block contains only one transaction, then it does not useMerging multiple transactions into a single transaction significantly reducesnetwork load and commission costs. 

Packing function can make Bitcoin networkmore convenient to use, reducing the overall commission and freeing up space on the blockchain. This will allow the network to increase throughput and help increase scalability.

Unlike some scaling proposals that provoked a stormy community backlash, packaging became one of the most popular solutions.

Implement such batch processingproposed by David Harding back in 2017, only exchanges can. Kraken, Bitfinex, Shapehift and other platforms have actively started launching this feature. Coinbase and Coinbase Pro already added transaction batching functionality to their platform last week.