Coinbase Rolls Out System to Free Up Stuck Bitcoin Payments

Crypto exchange Coinbase has deployed a system aimed to automatically reduce delays in bitcoin payments arising from transaction fee volatility.

AccessTimeIconOct 3, 2018 at 11:00 a.m. UTC
Updated Sep 14, 2021 at 1:53 p.m. UTC
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.
Consensus 2023 Logo
Join the most important conversation in crypto and Web3 taking place in Austin, Texas, April 26-28.

With transaction fees "volatile and unpredictable," sending cryptocurrencies can sometimes be frustrating.

So says U.S.-based crypto exchange Coinbase in a new blog post that sets out the issues rising from shifting miner fees, and exactly what it has been doing to address the problem.

As most who have sent or received bitcoin will know, the primary problem is that the fee variations can mean significant changes in the amount of time it takes for transactions to be confirmed. Coinbase says this wastes company time in pointless support requests and provides users with a "frustrating experience."

The reason fees rise and fall so readily is that rather than clawing back transaction costs via a percentage – as card firms like Visa and Mastercard do – bitcoin and other cryptocurrencies pay miners a fee to confirm transactions. And that's based on a model not dissimilar to bidding at an auction.

At times when the bitcoin network is busiest, miners have a queue of transactions to process and these are prioritized by dealing with the transactions offering the highest fee first.

But the method can cause lengthy delays before transactions are confirmed and the funds have "arrived." It can also cause spiking fees at the busiest times, as was seen in late 2017 when the price shot up to an all-time high of around $20,000.

CoinDesk - Unknown

Historic daily average transaction fees in satoshis per byte (Source: Coinbase/

To address the issue, Coinbase says it has turned to a procedure which uses economic incentives built into the bitcoin protocol for improving confirmation time of transactions.

"Child Pays for Parent" (CPFP), as it is called, has been rolled out at across the company' systems in the last few months.

CPFP works by following up a stalled bitcoin transaction (with a fee too low for the current market to want to process immediately) with a so called "child" transaction – a later transaction linked to the original "parent" transaction, and in this case, set to offer a higher fee.

Since bitcoin mining clients will often batch a group of transactions, adding a better-rewarding child transaction can cause the parent to be processed sooner, the post indicates.

Coinbase says that the process kicks in after a payment has been stuck for "at least 4 blocks" and has at times been used to automatically "rescue thousands of transactions in a single day."

The exchange adds that CPFP is carried out without the need for interaction from the customer and the results have been "really positive" so far.

Delays image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.