Kataryna Kovtun May 22, 2020
A waiting list of unconfirmed transactions formed in the blockchain of the first cryptocurrency. The size of the commission charged by the miners increased by 7–10 times compared with April.
After halving in the Bitcoin network, there was a sharp increase in the number of unconfirmed transactions. According to blockchain.com, this figure reached 72 MB, while rising to 98 MB. Since the beginning of the year, it ranged from 0.3 to 15 MB, occasionally exceeding this value.
The current figure of 72 MB is the second largest since December 2017. It indicates congestion in the coin network, i.e., overflow of the mempool. A queue has formed of users who want to transfer bitcoins. But the current number of miners is not enough to satisfy demand.
Reasons for Bitcoin Network Congestion
This assumption is confirmed by two other metrics. Firstly, the hash rate fell in the network of the Bitcoin. It fell 40% after halving and now stands at 86 EH/s. Secondly, the average value of the commission that miners charge for confirming transactions has increased. In April, this indicator ranged from $ 0.4 to $ 0.9, now it has reached $ 6.6. This suggests that users are willing to pay more so that their funds are transferred earlier than others.
Another reason for the current network congestion could be that part of the mining farms in the Chinese province of Sichuan disconnected equipment due to a lack of electricity. Since the beginning of the month, the load on the region’s networks has grown by 22%, while the volume of water in rivers has decreased by 20%, which has led to a shortage of hydroelectric power. This led to a drop in the bitcoin hash rate, and then to filling the mempool.
How does this Affect the Cost?
The congestion of the Bitcoin network may speak in favour of an increase in its value. For example, on March 26, 2019, the number of unconfirmed transactions on the BTC network within 10 days soared by 24,500%, reaching 43 MB. At the same time, the growth in the value of the first cryptocurrency began, and in three months it went up from $ 4,000 to $ 14,000.
A similar overflow of the network occurred in early November 2017. After that, the course of the main digital asset during the month grew from $ 6,000 to $ 20,000. However, there are exceptions. For example, the last BTC blockchain overload occurred on November 15 of last year. No cryptocurrency rally followed. The reason for the overflow of the mempool could be a failure in the Blockchain.com service system or an attack on the blockchain coins by Bitcoin SV supporters. This date is considered the project’s independence day, since then there was a Bitcoin Cash hard fork, after which the BSV altcoin appeared.
If the price of bitcoin stays the same or falls, the situation with network congestion can only worsen. Miners will begin to turn off equipment, as cryptocurrency mining has become less profitable after halving. In this case, the hash rate will continue to decline, and the load on the blockchain will increase.
BitXmi team recommends traders closely monitor the course of cryptocurrencies. For this, we suggest using Coins Live Price on our website.
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