The Bitcoin network is experiencing a surge in unconfirmed transactions, with the backlog surpassing 400,000. Just two weeks ago, the number of unconfirmed transactions dipped below 300,000 before rebounding to its current level. While the average network fee remains relatively low, fluctuating between $0.77 and $2.59 per transaction, the backlog highlights the challenges faced by miners in confirming these transactions. The backlog is fueled by a combination of regular financial transfers and the persistent volume of ordinal inscriptions. Despite the decline in Bitcoin-based NFT sales, the production of inscriptions continues unabated. The article delves into the details of the backlog, transaction fees, and the impact on miners.
Bitcoin’s Transaction Backlog Surges Past 400,000
Bitcoin’s transaction backlog definition
Bitcoin’s transaction backlog, also known as the mempool, refers to the number of unconfirmed transactions waiting to be included in a block on the Bitcoin network. When the number of pending transactions exceeds the available block space, it results in a backlog, causing delays in transaction confirmations.
Surge in unconfirmed transactions
Over the past two weeks, the number of unconfirmed transactions on the Bitcoin network has seen a significant surge. Starting from just under 300,000 unconfirmed transactions on July 31, 2023, the backlog has now surpassed 400,000 pending transfers as of August 20, 2023. This increase in unconfirmed transactions has led to longer confirmation times and higher transaction fees.
Current number of pending transactions
As of August 20, 2023, there are 411,544 transactions waiting to be confirmed on the Bitcoin network. This backlog is causing delays in transaction confirmations, with users experiencing extended wait times for their transactions to be included in a block.
Block space required to handle the backlog
To handle the current backlog of pending transactions, approximately 124 blocks or over 238 megabytes of block space would be needed. Due to the limited block size, the backlog continues to grow as more transactions are sent to the network.
Average block time and hashrate
On August 20, 2023, the average block time on the Bitcoin network was 9 minutes and 40 seconds. This indicates that new blocks are being added to the blockchain at an average interval of approximately 9 minutes and 40 seconds. The hashrate, which represents the computational power used to mine new blocks, reached an impressive 411.82 exahash per second (EH/s) on the same day.
Expected rise in difficulty adjustment
Considering the brisk block times and the high hashrate, the Bitcoin network is expected to undergo a 5.10% rise in difficulty adjustment. The difficulty adjustment is a mechanism that aims to keep the average block time close to 10 minutes by adjusting the mining difficulty based on the network’s hashrate. This increase in difficulty will help ensure a more stable block time amidst the growing transaction backlog.
Factors contributing to the transaction backlog
Regular financial transfers
One of the factors contributing to the transaction backlog is the regular flow of financial transfers made on the Bitcoin network. As Bitcoin becomes more widely used as a means of transferring value, the number of transactions being sent daily has increased, leading to a higher volume of unconfirmed transactions.
Ordinal inscriptions volume
Ordinal inscriptions, another factor fueling the transaction backlog, refer to the messages or data transmitted through the Bitcoin network. On August 20, 2023, the number of ordinal inscriptions exceeded the milestone of 25 million. The continuous production of inscriptions adds to the growing number of unconfirmed transactions in the mempool.
Milestone of 25 million inscriptions
The milestone of 25 million inscriptions signifies the increasing activity on the Bitcoin network. As more users interact with the network by sending transactions or transmitting data, the overall backlog of unconfirmed transactions continues to rise.
Number of inscriptions transmitted on August 20
On August 20, 2023, a total of 234,120 inscriptions were transmitted across the Bitcoin network. This indicates the ongoing volume of activity on the network and the contribution of these inscriptions to the transaction backlog.
Comparison to previous day’s inscriptions
In comparison to the preceding day, August 19, which saw 300,653 inscriptions, there was a slight decrease in the number of inscriptions transmitted. However, this decrease did not significantly impact the overall transaction backlog, as the steady production of inscriptions remains consistent.
Bitcoin-based NFTs impact on backlog
While the fervor for Bitcoin-based non-fungible tokens (NFTs) in terms of sales volume has declined, the creation and transmission of inscriptions for NFT-related activities continue to add to the transaction backlog. Despite the slowdown in NFT sales, the production of inscriptions associated with NFTs remains unabated, contributing to the overall backlog of unconfirmed transactions.
Transaction fees during the backlog
Average transaction fee
Currently, the average transaction fee on the Bitcoin network is approximately 0.000032 BTC, equivalent to $0.836 per transfer. This fee is paid by users to incentivize miners to include their transactions in the next block. As the transaction backlog increases, users may opt to pay higher fees to expedite their transaction confirmations.
Bitcoin charges surpassing $1 benchmark
Between August 8 and August 12, Bitcoin transaction fees exceeded the $1 mark, with a peak fee of $2.59 per transaction. The increase in transaction fees during this period reflects the high demand for block space and the congestion caused by the growing backlog of unconfirmed transactions.
Mid-range fee and median transaction fee
The mid-range fee, which represents the fee required to have a transaction included within the next few blocks, is currently set at 0.0000084 BTC, equivalent to $0.22 per transaction. The median transaction fee, which is the fee value that separates the higher and lower halves of all transaction fees, reached $1.14 on August 8.
Spike in median transaction fee on August 8
August 8 witnessed a spike in the median transaction fee on the Bitcoin network, which reached $1.14. This increase in fees indicates the competition among users to have their transactions prioritized by miners, leading to higher fees being paid.
Comparison of fees on different platforms
Different platforms may have varying fee structures for Bitcoin transactions. Users should compare the fees charged by different platforms before initiating a Bitcoin transaction to ensure they are getting the most competitive rate. Additionally, during periods of high congestion and backlog, users may need to adjust their fee preferences to prioritize their transactions.
Miners’ struggle to handle the backlog
Miners’ challenges with unconfirmed transactions
Miners face challenges in handling the growing number of unconfirmed transactions on the Bitcoin network. As the backlog increases, miners need to select which transactions to include in a block based on their fee rates. When the demand for block space exceeds the available supply, some transactions may have to wait longer to be confirmed.
Impact on the ongoing backlog
The miners’ struggle to handle the transaction backlog has resulted in an ongoing backlog of unconfirmed transactions. The inability to process all pending transactions in a timely manner leads to delays and longer confirmation times for users. Miners prioritize transactions with higher fees, leaving lower fee transactions to wait longer in the backlog.
Comparison of median fee and high-priority fee
The median fee and the high-priority fee illustrate the trade-off between faster confirmation and lower fees. While the median fee represents the cost of having a transaction included in a block sooner, the high-priority fee offers a faster confirmation time but at a higher cost. Users may choose between these options based on their urgency and budget.
Opinions and comments
The growing backlog of unconfirmed transactions on the Bitcoin network has garnered attention from the cryptocurrency community. Users and enthusiasts are sharing their thoughts and opinions on this issue, discussing the impact it has on transaction confirmations, fees, and the overall user experience. The comments section provides a space for community members to express their views and engage in discussions surrounding Bitcoin’s transaction backlog.