on the crypto
Every day, in mid-morning in New York, the average rate that bitcoin users around the world pay to send cryptocurrency peaks for more than an hour, and then returns to normal. A well-known researcher thinks he has found the reason: BitMEX.
An expense that could be avoided
If the crypto-derivatives exchange used more efficient technologies when transmitting transactions, users could save up to around 1,7 bitcoins (worth more than $ 15.000 at the time of printing) in commissions every day, or about 7% of the total daily commissions paid, says the bitcoin engineer known under the pseudonym 0xb10c.
Whenever a investor submit a bitcoin transaction, face a (usually) small commission. Rates vary continuously, depending on congestion in the network. This is because the space for transactions is limited.
If there are too many transactions sent at the same time, miners will prioritize those with higher commissions. Since BitMEX transmits thousands of transactions simultaneously every day at the same time, it leads to an increase in commissions every day, claims 0xb10c. His research indicates that this has happened since at least September. BitMEX, which is based in the Seychelles, did not respond to a request for comment as of press time.
Pressure on commissions
Most bitcoin wallets have built-in tools that estimate what commission a user should add to a transaction to make sure it is accepted in a timely manner. If the network handles too many transactions at the same time and the fee is too small, it may take longer for the transaction.
Due to the numerous BitMEX transactions taking place simultaneously, clogging the blockchain, these tools increase the commission and many users pay them. While users obviously prefer lower fees, higher fees reinforce network security, especially when we approach the third halving of block rewards (the main source of miners' income right now), added 0xb10c.
There is a solution
Developers and other bitcoin enthusiasts have long sought to push large exchanges and wallet suppliers (well beyond BitMEX alone) to adopt scalability technologies that could reduce costs and make the network more efficient.
These include Segregated Witness or SegWit, an update that has been available since 2017. In addition to SegWit, 0xb10c has recommended BitMEX to use the "output batch", an old technique that consists of cramming many transactions into one to save transaction space. He also mentioned Schnorr / Taproot, a Bitcoin update that's been in the works for years and which some developers estimate will finally be released in the next year.
“By using scalability techniques, some of which have been industry standards for several years, the impact could be reduced. BitMEX is going in the right direction by planning to switch to SegWit. But they don't have to stop there, ”wrote 0xb10c.
