Contributes Updated Open Source Library for UTXO Transaction Building
PALO ALTO, Calif., July 26, 2018 -- BitGo, Inc., the market leader in institutional-grade cryptocurrency investment services, today announced that it has launched Predictive UTXO (Unspent Transaction Output) Management for fee-sensitive transaction building to address the costs associated with operating high traffic wallets. BitGo is the first company to bring Predictive UTXO Management to institutional investors. Early results show that Predictive UTXO Management can deliver transaction fee savings of up to 30 percent.
The increasing fragmentation of coins has created an environment where customers often hold up to hundreds of thousands of tiny coin fragments. Using each of these fragments requires a processing fee and customers can incur significant costs when many fragments are processed when transaction fees are high.
Predictive UTXO Management is an algorithmic solution that automatically takes advantage of low transaction fees to address the costs associated with processing many coin fragments. Developed by Mark Erhardt, BitGo engineer and Bitcoin Core contributor, Predictive UTXO Management reduces the overall cost by minimizing transaction sizes at high fee rates, while automatically sweeping up and processing many small fragments of coins when fees are low. As a result, more coin fragments are spent at lower fee rates, reducing transaction fees overall. Savings are dependent on usage patterns and future fee rate values. Clients with larger wallet balances are likely to see more savings than clients with smaller wallet balances.
Examples of Savings with Predictive UTXO Management
“Our focus on the institutional market means that we have large clients, holding large balances and fee optimization can have a dramatic effect,”
said Mike Belshe, CEO, BitGo.
“Mark’s algorithm improves the experience of BitGo clients and it will improve the experience for all Bitcoin investors because it was recently adopted by the Bitcoin Core team.”
Open Source Library for UTXO Transaction Building In the course of development, the BitGo engineering team expanded the bitcoinjs library to support other cryptocurrencies including Bitcoin Cash and Zcash’s latest fork. The resulting library, bitgo-utxo-lib, is now available on GitHub and NPM. The library does all the heavy lifting for protocol implementation so any developer working with UTXO-based blockchains can use this library to build transactions and sign them.
“We’re committed to contributing back to the open source community and we will continue to maintain this library,”
Predictive UTXO Management is now active for all BitGo Platform V2 wallets that have UTXOs. Clients using Platform V1 should move their funds to Platform V2 wallets.