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Theo Somers @theomsomers
, 9 tweets, 2 min read Read on Twitter
1/ An indicator for assessing #bitcoin's use by exchanges and mining pools vs everyday users and how we can scale without ANY code change. $BTC

Using an UTXO batching model.
2/ There are two ways to reduce transaction fee's on the bitcoin network.
-Input consolidation
-Transaction Batching
3/ Input consolidation or UTXO consolidation is the process of merging many transactions into one by periodically (when network fee's are low) sending UTXO sets to yourself so when you need to send the tx you only need to sign once.
4/ Transaction batching is the practice of utilising multiple outputs in a single transaction. A typical single output transaction takes up 230 bytes, while a two output transaction only takes up 260 bytes. This is an often overlooked feature....
5/ ...but is used by mining pools and exchanges regularly when they can trade of immediacy for convenience when disseminating their bitcoins.
6/ Most user wallets don't allow this feature and for the average, nontechnically aware user who uses bitcoin for an SoV, speculation, merchandise, transaction batching is not used. For large institutions who send multiple payments regularly, this is a not insignificant benefit.
7/Batching accounts for roughly 12% of all transactions, 40% of all outputs, and 30–60% of all raw BTC output value. This shows 2 things...
8/
1) Up to 60% of all value in bitcoin goes through exchange/mining pools etc
2) Scalability can be increased with NO additional code change if 88% of user transactions and client wallets can better incorporate optional batching for settlement.
Thanks to @hasufl for inspiring this thread.
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