Critics have raised concerns over Coinbase’s lack of segregated witness and transactional batching that would facilitate less congestion on the Bitcoin Blockchain network. This comes at a time when Bitcoin users are grappling with long transactional periods that sometimes even mean hours just to complete a transaction. Coinbase (a well respected exchange and wallet platform worth about $1.6 billion) is among the largest in the world, serving about 10 million clients in the cryptocurrency space.
According to Jameson Loop who is a leading architect and engineer at BitGo( a Blockchain multi-signature security provider), cryptocurrency users who do not want to contribute to the problem should stop using “services such as Blockchain, Coinbase and Gemini who are using block space inefficiently”
Reducing Bitcoin Network Congestion
To reduce network congestion and transactional fees, Loop further mentioned that several exchanges in the cryptocurrency world were using SegWit and IIRC batching to relieve the network. He noted that “Bitstamp, HitBTC, Kraken, LocalBitcoins and QuadrigaCX all use both SegWit and Batching IIRC”
Although the daily volume of Bitcoin trasnactions has reduced from a previous value of over 450,000 transactions down to 225,800 transactions according to market data from Blockchain( the second-largest online wallet platform after Coinbase), the Bitcoin mempool size is still solidly above 121 million bytes with an average of 1.05 MB per block.
What Is the Mempool?
Basically, the mempool acts as a holding area for transactions on the network that are yet to be confirmed on the Blockchain. Here, it is the job of the miners to pick up a transaction from the mempool so as to confirm and publish the payments on the Blockchain. However, the mempools have become congested and by the looks of it, the network seems to be showing the same levels of congestion as experienced a few weeks before, when the transactional volumes were twice the current volume.
With a congested mempool comes increased difficulty for miners, as they find it hard to quickly process each transaction. This can potentially reduce the accessibility, efficiency and usability of Bitcoin as an exchange medium.
In addition to the criticisms by Loop, other experts in the cryptocurrency universe have also expressed their concerns over the lack of a dynamic fee system on popular platforms such as Blockchain and Coinbase, that process large transactional volumes.
The Response From Coinbase CEO
However, according to a post on Twitter, Brian Armstrong, the CEO of Coinbase, has responded to the criticism by announcing plans to improve transactional backlogs on the Bitcoin Blockchain network, indicating that the company will add batching transactions and SegWit to its platform.
But even with the implementation of batching and SegWit, it is still unclear whether the issue of congestion and scalability of the Bitcoin Blockchain network will be solved. For now, however, these two solutions are the community’s only way out of a congested Bitcoin network.
Coinbase is working on batching transactions, SegWit, and a number of other strategies to improve transaction backlog. Thx for bearing with us!
— Brian Armstrong (@brian_armstrong) 12 January 2018
Do you think the implementation of SegWit and Transactional Batching will help the Bitcoin community solve the issue of a congested network? Talk to us in the comment section.