Basically, the rapid evolution of decentralized finance and the innovative features and services that continues to come along with it has basically presented and offered to the users of the cryptocurrency world and market some advanced and frankly unprecedented opportunities but the unfortunate thing now is that with these advanced opportunities comes also some very significant challenges and hurdles to the decentralized finance and the underlying blockchain networks and while the all motto of the cryptocurrency network and its foundation and core is built on the promise of secure, immutable, and transparent transactions however, the practical application often runs into issues of scale.

And as a network’s user base and transaction volume continues to increase and grow, so too can the cost and time and resources associated with processing, executing and completing each individual transfer, this dynamic and concept is often referred to as a "scalability trilemma," pits decentralization, security, and scalability against each other and one of the most effective and widely adopted solutions to this challenge is transaction batching, transaction batching refers to a technique that when implemented is able to powerfully optimize and fundamentally shift the economics and efficiency of a blockchain with transaction batching, instead of processing each transaction as a separate and discrete event, transaction batching groups multiple transfers into a single, cohesive transaction.

This consolidation or this grouping of transactions is a fundamental and strategic means and method or solution that optimizies the efficiency of transaction processing and basically this strategic solution has a cascading effect, which basically leads to significant cost reductions, enhanced network efficiency, and a vastly improved user experience it therefore would not be saying too much, or be overestimating to say that it is an essential strategy for any decentralized platform, to have and implement particularly for those on high throughput networks like Tron, which PussFi (PUSS) utilizes however, although implementing transaction batching in the puss network or in puss coin based transactions has a lot of advantages and benefits it also has some disadvantages too, as I will explain in this post.

PROBLEM OF DELAYED SETTLEMENT.

So basically, one of the most immediate and significant disadvantages of transaction batching is that it inherently introduces some delays in the financial and transaction processing and executing process than when compared to the transaction that was not batched or consolidated so basically unlike in the traditional or will I say true or original peer-to-peer transaction where a user’s payment is immediately broadcast and awaits confirmation, a batched transaction must wait, during this waiting period, the funds are basically first sent to a designated intermediary or a custodial wallet, where they sit in a queue, awaiting a sufficient number of other transactions to be bundled with them, so again this waiting period can be a few seconds, a few minutes, or even longer, depending on the volume of activity and how many transactions that is designed or planned to be bundled or batched together.

Now this waiting period becomes a delay and this delay is experienced and felt differently by the different parties involved in the process of processing and executing the financial transaction, so first of all fo r the end-user, this delay and waiting creates an experience that feels less like a seamless digital payment and more like a traditional bank transfer, to simply my point please consider the scenario where one needs to make a time sensitive payment, such as a point-of-sale purchase at a coffee shop or a micro-lending platform requiring immediate collateral now in these scenarios, a user cannot afford to wait for a service to gather enough transactions to form a profitable batch before executing before he or she is now able to carryout his own transaction or make use of their funds rather, they will require instant confirmation that their funds have been successfully transferred and are ready for use, it is now left for the platform to decide if sacrificing real time settlement for the sake of fee optimization, transaction batching is justifiable or if it fundamentally diminishes the utility and convenience of the puss token.

COULD COMPROMISE ONCHAIN PRIVACY

A second major drawback and disadvantage of transaction batching is its profound impact on user privacy now while many cryptocurrency transactions are considered pseudonymous, meaning a user’s identity is not directly linked to their wallet address, batched transactions operates in a way that it creates a significant data trail that can be used to detect and find out the identity of users this is unfortunate but it is seen that when a service provider bundles dozens of independent transactions into a single on-chain event, it creates a transparent link between all the senders and the eventual recipients within that batch and basically for any external observer or a data analysis company, or the governmental authorities this is a treasure trove of information because with this information they can easily see that all the transactions in a specific batch originated from a single source which is the service provider’s wallet and then the funds and assets were distributed to a specific set of users.

This information that might not look like much basically makes it far simpler to trace the flow of funds and then to associate multiple, seemingly unrelated wallet addresses with a single real world entity, now to simplify the point I’m trying to make take for instance that you and a hundred other users all withdraw puss tokens from a centralized exchange in a single batch, an analyst or investigator will be able to confidently link your individual wallet addresses to that specific exchange this basically defeats the purpose of maintaining a separate, private on-chain identity and while the intention of batching is to increase and optimize network scalability and traffic, its consequence is the creation of a public record that compromises the financial privacy of all participants.

CONCLUSION

In conclusion, while transaction batching is a clever and necessary solution to the scalability challenges faced by high volume blockchains, its disadvantages are far too significant to ignore and that is why I am providing you with a post that discusses and explain these disadvantages and only yesterday I explained the advantages so now all usees can have a balanced view of the decision of implementing transaction batching in the puss coin network and in puss coin based transactions.