Bitcoin's Cutting-Edge 'Coin Selection' Tech Gets First Major Integration

Crypto security startup BitGo's latest technology - "Predictive UTXO management" - sounds technical, but it's got an end goal that everyone will understand: cutting crypto fees.

Revealed exclusively to CoinDesk, BitGo is the first mainstream crypto company adopting a spin on "Coin selection," a scaling technology that's been one of many touted as a way to ease the industry's obsession with lowering fees since they spiked to over $20 a transaction in December.

The industry jolted into action, looking into technologies that could help chip away at these fees.

As long-promised, coin selection more efficiently selects what coins go toward a particular transaction, and thus could have a big impact on users the next time fees go up.

"If fees fluctuate again in the future, customers will save a lot on fees."

Each transaction fee depends on how much data is put into a transaction, rather than its value, as in traditional payment systems.

Spending transactions with a large number of inputs when fees are lower, like today, is not as expensive.

Erhardt said his company is "Operating under the assumption" bitcoin fees will continue to fluctuate over time, which is why the actively reacting algorithm is so necessary.

Last time, fees spiked when the cryptocurrency world saw a flood of new users correlating with an increase in the price per bitcoin.

Even with today's lower fees Erhardt expect the algorithm to have a big impact.