Crypto glossary
Transaction batching
Transaction batching means paying many recipients in a single Bitcoin transaction instead of one each, sharing the fixed overhead and cutting total fees.
Every Bitcoin transaction carries overhead: inputs to sign, a change output and fixed fields. If an exchange processes 100 withdrawals separately, it pays that overhead 100 times. With batching, it creates one transaction with 100 outputs plus one change output, funded by a few inputs. Each extra output adds only around 31 to 43 vbytes, so the cost per payment drops sharply.
Exchanges, payroll services and mining pools batch routinely, sending withdrawals every few minutes or hours. Analyses have shown savings of 75% or more on fees for large batches, and widespread batching also reduces the number of transactions competing for blockspace, easing congestion for everyone.
The trade-off is waiting: users may see their withdrawal delayed until the next batch. All recipients in a batch can see each other's outputs on-chain, which reveals that they used the same service. If the batch transaction gets stuck because the fee was too low, every payment in it is delayed together, so batchers need to manage fees with RBF or CPFP.
Example
Instead of 50 separate transactions, an exchange sends one batched withdrawal to 50 users; the total fee is about the same as eight individual transactions would have cost.