Coinkite has added smart UTXO (Unspent Transaction-Out) management to give Bitcoin merchants more control over their virtual money.
Bitcoin is often heralded for allowing instantaneous transactions across the world, but that isn't exactly true. In order to ensure the legitimacy of every transaction, they must first be confirmed by the users that keep the Bitcoin system running. This process can sometimes take ten minutes or more before the party who purchased the coins (by either selling a product or in fiat currency) can actually have access to them.
That isn't a big deal for most end users who are sending money to buy things once or as a tip to another Redditor or various other one-time-transaction functions. It does become a problem for companies on the other end of the spectrum, ones that are dealing with a high number of transactions over a short period of time. For them, the liquidity, or specifically the lack thereof, in Bitcoin can be a problem.
For those who buy and/or sell bitcoins at a fast rate, waiting for the blockchain to confirm a transaction and give them access to the rest of their bitcoins can be a pain. The coins remaining in a wallet become part of an unspent transaction, essentially the change of an order. Those coins are sometimes locked down until the previous transaction is confirmed.
By splitting user's coins among many UTXOs, the majority of a users coins will be held in a separate place and will still be able to be spent by the user, even as his or her last transaction is still in the process of being confirmed.
This doesn't solve all the problems with the blockchain confirmation wait period. It doesn't, for an example, prevent users from canceling their transaction before it's confirmed and then “double spending” it. That is a problem that has mostly been solved by the community, except for companies with a high volume of transactions and an immediate point of sale( like a coffee shop).
That issue remains a major obstacle in Bitcoin's quest to become mainstream, but Coinkite has managed to lessen its effect on users by freeing up the coins not needed in the transaction, and that increased liquidity is a major advancement.
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