What is bitcoin batching
Batching or otherwise packaging is a technique used to localize as many operations as possible in the blockchain block of Bitcoin. Packing plays a big role, because the consolidation of several tranches into one operation is economically viable, both from a financial point of view and from the point of view of occupied volume.
Combining multiple transactions into one creates cheaper and lower fees for everyone on the network. While transaction fees never exceeded 31 cents on average, by the end of 2017, commissions jumped to almost $ 50, which made batch processing a very popular concept.
More on Batching
Bitcoin uses the Unspent Transaction Output Model (UTXO). In Bitcoin, the user has no balance – only UTXO, which he controls. When transferring funds, the wallet selects one or more UTXOs as input, which together should make up the necessary transfer amount.
Then the desired amount is received by the recipient – this is called the output, and the difference or otherwise the change is returned to the sender – this is a change in output. Therefore, when it comes to reducing the number of operations, there are two ways out.
- Users can consolidate their UTXO and use as little input as possible. That is, send small UTXOs during periods of low fees in order to receive one large UTXO in return.
- Alternatively, if the user often performs translations, he can draw an almost unlimited number of conclusions for different recipients in one transaction. This option is also known as packaging.
Packing is a great way to reduce the number of transactions, because one Bitcoin operation can combine thousands of others. Therefore, packaging is very common on mining pools or cryptocurrency exchanges, where transfers often occur.
To present clearly use the analogy. Imagine transaction packaging is a mail truck full of mailboxes. A truck is a global transaction, mailboxes are single smaller transactions, and the contents of mailboxes are Satoshi and Bitcoins.
How popular is the batch concept
Batching currently accounts for approximately 12% of all transactions. As for the output value, it accounts for 40% of all outputs and from 30 to 60 percent of the total raw output value of bitcoins.
If we compare the number of transactions within the Bitcoin network at different periods of its existence, it becomes clear that over time the number of transactions has decreased, but this is due to an increase in batching operations.
Butching has become a salvation for users and developers of the network, as it allowed to reduce and fix the size of commissions. But this concept is sometimes misleading to those trying to evaluate the performance of a token in the market. In particular, investors, traders and analysts.
To obtain reliable data, it is necessary to focus not on the number of transactions, but on the indicator of the number of payments per day – this will be the correct value of the sent transfers.