Bitcoin Network Overloaded with Over 460,000 Pending Transactions

The Bitcoin network is currently facing congestion with more than 460,000 transactions pending, leading to significant fluctuations in transaction fees.

According to data collected from Bitcoin's Mempool, the world's largest cryptocurrency network is experiencing its longest-ever congestion period, with over 460,000 transactions awaiting processing. This indicates difficulties in handling the increasing transaction volume, resulting in higher transaction fees and slower confirmation times.

The Mempool serves as a temporary record of all Bitcoin transactions awaiting validation by miners, after which they are added to the next block on the blockchain. Each node in the Bitcoin network maintains this temporary Mempool. Transactions in the Mempool are periodically cleared after each new block is added to the blockchain.

At the time of writing, the Mempool data indicates there are 460,564 transactions waiting to be confirmed for processing. However, transactions queued in the Mempool are only processed and confirmed when they meet the minimum transaction fee requirement. Transactions with lower fees must wait longer, potentially spanning multiple blocks before being processed and confirmed.

During network congestion, miners tend to prioritize higher fee transactions, causing delays for lower fee transactions. Consequently, users seeking faster transaction confirmations must pay higher fees, leading to an increase in the average transaction cost across the Bitcoin network.

Data from bitinfocharts also shows that the average Bitcoin transaction fee is currently at $2.94, the highest since July 2023. Compared to the recorded fee of $1.021 on the same day a year ago, this represents an approximately 188% increase in the average Bitcoin transaction fee over the past year.

This is not the first time Bitcoin has faced congestion issues. In May 2023, the network also experienced similar transaction backlog, driving the average transaction fee sharply up to over $19, peaking at $31.1 on May 8, 2023.

As reported by Coin68, the current congestion issue is primarily attributed to the emergence of Bitcoin Ordinals and BRC-20 tokens, contributing to the increasing number of inscriptions and significantly driving up transaction fees on the Bitcoin blockchain.

Bitcoin Ordinals, previously known as Bitcoin NFTs, emerged as one of the most notable narratives in Q1 2023. The introduction of Ordinals brought the story of NFTs and smart contracts to Bitcoin's longstanding blockchain. During its peak, Bitcoin Ordinals transaction volumes consistently rose, reaching a peak of $452 million in May 2023.

However, over 80% of the inscriptions during the hype were mostly memecoins, and as the hype subsided, the market swiftly shifted to other trends, leading to a significant decline in attention towards NFTs on Bitcoin.

Therefore, the current transaction congestion issue has not significantly impacted BTC prices. At the time of writing, BTC is trading at $26,631 with minor fluctuations.

Bitcoin price on Coinmarketcap's 1D chart. Screenshot taken at 12:05 PM on September 22, 2023.