BIP 152, described in BIP-152, introduced a more efficient block relay mechanism. Instead of transmitting full transaction data, nodes send short transaction IDs to peers who likely already have the mempool transactions. Think of it like a “fingerprint” list for each transaction, letting nodes quickly reconstruct the block.

By cutting down on redundant data, Compact Blocks reduce overall bandwidth, speed up block propagation, and help the network converge on the latest blocks faster. It’s particularly useful during times of high transaction volumes, where saving every byte can improve node performance and reduce orphan rates.