{"id":86982,"date":"2018-10-03T14:27:30","date_gmt":"2018-10-03T21:27:30","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=86982"},"modified":"2020-03-24T06:55:24","modified_gmt":"2020-03-24T06:55:24","slug":"coinbase-leverages-child-payments-to-enhance-bitcoin-btc-transactions","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/coinbase-leverages-child-payments-to-enhance-bitcoin-btc-transactions\/","title":{"rendered":"Coinbase Leverages “Child Payments” to Enhance Bitcoin (BTC) Transactions"},"content":{"rendered":"

San Franciso-based cryptocurrency exchange and wallet Coinbase<\/a> revealed an innovative method for handling millions of \u201cstuck\u201d Bitcoin<\/a> transactions on its platform, addressing one of the most voiced problems with the rising asset class on an enterprise level.<\/p>\n

Bitcoin\u2019s \u201cStuck\u201d Transactions<\/h2>\n

As published<\/a> on its official blog on Oct. 3, Coinbase detailed the \u201cChild Pays for Parent\u201d (CPFP) procedure to fulfill thousands of BTC transactions per day, circumventing issues faced by customers due to network congestions, volatile fees, and slippages.<\/p>\n

Noting the foremost steps taken to avoid customer dissatisfaction, Coinbase stated two steps are taken if transactional issues arise; first, balancing the transaction fee in real-time. Second, manually choosing a fee to include transactions faster in a particular block.<\/p>\n

\"Crypto
Related:\u00a0Crypto Exchanges See Big Demand From Investors: Coinbase Worth $8 Billion<\/a><\/figcaption><\/figure>\n

For the uninitiated, Bitcoin transactions rely on an auction-like, fee-based structure for miners to include transactions on the network. Typically, the highest fees are the most preferred, and low fees take substantial time to be confirmed. However, if several people rely on the same third-party applications to include their transaction on the next block while offering the same fees; the latter is expected to increase significantly in the case of network congestion.<\/p>\n

The problem herein lies in transactions with higher fees getting confirmed ahead of a person who attempted to transact prior to an increase in network activity. Such a setting leads to \u201cstuck\u201d transactions, which continue to be unconfirmed unless the network is decongested and the fee rates drop.<\/p>\n

Leveraging Bitcoin Protocol<\/h2>\n

A possible solution to the points as mentioned above is to introduce a method for incentivizing miners to confirm transactions that are listed on a low rate during times of network congestion. Such an economic strategy is called the CPFP, which leverages the math behind the Bitcoin protocol for inputting older, low-fee transactions before confirming new, more-fee ones.<\/p>\n

\n

Blockchain transaction fees can be notoriously volatile. Learn how our engineering team is using a technique called Child Pays for Parent to improve the reliability of #Bitcoin<\/a> transactions for our customers. #CPFP<\/a> https:\/\/t.co\/oRzxeqx9RM<\/a><\/p>\n

— Coinbase (@coinbase) October 3, 2018<\/a><\/p><\/blockquote>\n