Optimizing for Blockspace usage - BitcoinVN adding batched SegWit withdrawals

Vietnam’s oldest Bitcoin exchange BitcoinVN launched the option for their client base to pick batched transactions for order settlement; allowing them to save 50% on the Bitcoin network fees charged by the service. 

While instant settlement remains an option, the user now has the choice to delay the settlement of his Bitcoin purchase in order to save on transaction fees via transaction batching.

BitcoinVN operates a Bitcoin brokerage model (similar to Coinbase in the North American market which recently listed on Nasdaq) which settles trades from Vietnamese Dong into Bitcoin (and other popular cryptocurrencies/stablecoins) immediately upon receiving the client’s funds.

While the core business model has been unchanged since the launch of service in early 2014, the changing environment around the available, limited block space on the Bitcoin blockchain and the therefore resulting transaction fee market make it increasingly untenable for retail users to receive single Bitcoin (on chain) transactions.

“We have been starting to implement transaction batching solutions in recent months on our OTC trade desk as well as on the trading platform VBTC which belongs to our group.  

http://bit.ly/32LbCLR

We have seen tremendous uptake and demand for batched transactions among our client base since the savings on transaction fees start to become very significant.

Given this background, it was just logical to roll transaction batching out to more of our services.” 

– BitcoinVN Co-Founder Dominik Weil

The past year has seen a steady increase in the average value for Bitcoin transaction fees, partially related to the rising price of Bitcoin – partially due to the increased transaction demand.

A single Bitcoin transaction is getting increasingly pricey - Source: ycharts
A single Bitcoin transaction is getting increasingly pricey – Source: ycharts

The last time the transaction mempool was fully cleared was during the Christmas holidays of 2020.

Transaction backlog in Bitcoin’s mempool over the past six months - courtesy mempool.space
Transaction backlog in Bitcoin’s mempool over the past six months – courtesy mempool.space

The recent situation around the hashrate drop related to power outages in Bitcoin mining facilities in Xinjiang highlighted once more the need to streamline services for efficient blockspace usage which not only benefit the users of said services but also the community in general by minimizing the blockspace consumed and thereby increasing the economic density per byte on the Bitcoin blockchain.

It remains to be seen how the increased demand for Bitcoin will be counterbalanced by protocol upgrades like Taproot and second layer scaling solutions such as the Lightning Network, sidechains and various IOU layers which only provide final settlement on the Bitcoin blockchain.

You can sign up for BitcoinVN here – serving as a gateway to the Bitcoin world since 2014.

You can earn affiliate rewards by referring your friends to BitcoinVN via the BitcoinVN affiliate program.