TL;DR
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Late final week, out of nowhere, BTC transaction charges began to skyrocket.
Which made us query…was this due to Gamestop? Had Runes all of the sudden had an enormous breakout? Or one thing else?
Seems, it was one thing else.
The third largest crypto trade on the planet – OKX – simply consolidated a whooole bunch of unspent transaction outputs (UTXOs).
Right here’s what meaning:
Think about Seb needed to ship Chevy 5.1 BTC.
Chances are high, Seb doesn’t have precisely 5.1 BTC in his pockets (particularly if he has accomplished a couple of BTC transactions up to now).
So as an alternative of transferring precisely 5.1 BTC, Seb may switch 5.2 BTC as a result of proper now, in Seb’s pockets, there’s 5BTC and 0.2 BTC (see the header pic or watch this video for a greater understanding).
The ‘change’ Seb receives (0.1 BTC minus any charges) would grow to be the UTXO.
Now, this turns into an enormous drawback for a crypto trade that sees 1000’s of trades per day, with most leading to some quantity of UTXO.
And sometimes an trade may consolidate their major wallets to cut back UTXO’s – all within the plan to cut back the price of future transactions, and cut back congestion on the Bitcoin community for future trades.
Which is precisely what occurred on Friday.
The excellent news is, this isn’t a brilliant widespread factor for exchanges to do (they could do it a few times per yr) – but it surely does really feel like one thing that wants some enchancment.
The Runes Protocol has gone a great distance to assist remedy for this and there are in all probability different options being labored on as we converse.
Cause #4283 why we love crypto: fixed innovation.
