In the Bitcoin network, the concept of Mempool is prominent. So if you have even recently engaged in cryptocurrency, you have probably heard about it. This article will explain why there is a Bitcoin Mempool and why it is important to understand how it works.
In a nutshell, Bitcoin Mempool is one of the stages in the coin transfer system, namely waiting room for a transaction. When a transaction is verified by a node, it waits in the Mempool for the miner to take it for itself. Every full node of the Bitcoin network supports the Mempool. If you want to know exactly how this happens, stay on the page. The review will tell you about:
- Bitcoin Transaction
- Bitcoin Mempool Coordination
- Bitcoin Mempool Structure
- Mempool in the Bitcoin Network
- FAQ Section
How Does a Bitcoin Transaction Work?
Bitcoin transaction, that is, the transfer of coins from one user to another, takes place in several stages. A significant part here is checking the transaction on all the computers on the network, that is, all the nodes that are currently free for this activity. The block size may not allow for a large number of transactions, so they have to wait, for example, two blocks before being fully processed and confirmed. There are dates when the Bitcoin mempool cleared, and there are more opportunities for transferring money.
After the transaction is verified by the node, it goes to the next stage. Actually, this is the Mempool, a specially allocated area for the temporary storage of unconfirmed transactions. In this waiting room, the transaction waits for the miner to come for it and pick it up to include it in the next block. In this order, the transaction passes through the blockchain. Since this section has a storage function, its name stands for “Memory Pool.”
Thus, the Bitcoin network has verification nodes, and waiting zones are allocated in them for verified but yet not confirmed transactions. In short, this is the storage area of unconfirmed transactions for all pending transactions, that is, not yet considered and not accepted by the miner. Miners check the transactions and pass them to a new block, and then they are passed on to blocks peers. There is a special chart that shows this process (for information about the chart, see below).
Each node can store a different number of transactions waiting, depending on its volume and throughput rate. Therefore, each of them has its own version of unconfirmed transactions. This is one of the factors that explain the difference between Mempools.
Bitcoin Mempool Coordination
Since a single node can process quite a lot of transactions, it can have many unconfirmed transactions at the same time. The Mempool size is not infinite, so how does the system handle it?
The issue is resolved with a transaction fee. As soon as the number of pending transactions reaches the set limit, the node starts sorting them by priority. Each transaction pays a fee and has a size, so the system starts sorting them by these parameters. The node sets the minimum transaction fee and thus builds a payment queue.
In order to stay in Mempool in this situation, you must pay a higher fee for your transaction. This may not look very friendly to users, but it gives them the opportunity to transfer money. Transactions paying a higher fee (including it depends on the transaction size) are faster on the blockchain. Small amounts of BTC or other crypto usually suffer at the same time as they do not involve a large transaction fee.
If the transaction fee is less than the threshold entry, these transactions are removed from the Mempool. After temporarily clearing the memory, access is opened for new transactions, but only if they are with a sufficiently high fee. Thus, an increase in the number of transactions leads to higher and higher fees. This system allows the Bitcoin network to keep nodes and Mempool from overloading and crashing.
Bitcoin Mempool Structure
Among other improvements for the operation of the Bitcoin network, Mempool is designed to establish communication between nodes of different levels, external and internal. This is done so that data about transactions and transaction fees that are stored in the Mempool becomes available to users. BTC dealers may be interested in this in the following cases:
- An owner of a lite wallet wants to get up-to-date information about the transaction before it was transferred to the block.
- A miner wants to load a list of unconfirmed transactions to start checking and confirming them.
- A miner wants to check if there are any profitable fees from transaction fees.
- A miner wants to evaluate the fee rate.
- The miner or operator wants to collect data statistics on the Bitcoin network and blocks.
- An operator wants to diagnose the Bitcoin network and service.
Thus, information about transactions is useful for a wide range of people of the Bitcoin network. Mempool is not only a waiting area for transactions but also informs miners and operators about the status of funds in transactions. This data is processed on the full node and is updated regularly so that the transaction status information is always correct.
At the same time, you should not treat a Memory Pool as full-fledged storage. This is not the case at all since its main task is to pass through payments. It should conduct as many transactions as possible in a short time to transfer them to the new block and take the next ones.
Mempool in the Network
It is important for miners to maintain a uniform rate of progress of transactions on the blockchain, that is, the distribution of the receipt of transactions in the Mempool and their exit to the next block. If there are a lot of unconfirmed transactions waiting in the pool and a lot of next ones are on the way, this creates congested traffic and leads to delays in the transfer of BTC and other money. No matter how many transactions remain in the Mempool at the same time, they must be sorted promptly. The mechanism, as we have seen, is fee-based.
The use of Mempuls in the network also implies a complete cleaning of the pools. When the miner sends the last block to the node, it clears the Mempool of all the transactions currently contained in it. This means that all transactions paid a fee and were confirmed. The result is an increase in the amount of memory in the pool. There are points when the Mempool cleared of the date and is ready to accept transactions for transfer to the next blocks in full.
There is a special chart to track the status of the Mempool. You can see the mempool size and number of transactions on the y axis. This chart allows miners to collect statistics and predict the load of the Mempool, as well as the increase or decrease in fee in the nearest future. The data is aggregated, taking into account the number of transactions waiting and confirmed transactions when they are passed on to the next blocks. We get to see the Mempool traffic and the average waiting time. In addition, the chart provides more information about the movement of BTC on the network, taking into account the transition of transactions by blocks.
How Long Does it Take to Confirm a Transaction?
On average, the time to transfer a transaction to a block takes 10 minutes (in practice, it can take up to an hour). The transfer rate per block depends on the size of the transaction fee. You can view the chart here to understand the network load time and make transactions in more free periods.
How do I Advance a Transaction to the Next Block?
If your transaction has not been confirmed within two days, you can increase the fee for it. Another way is to speed up the transaction for a fee (some pools provide such a service). In short, the higher your fee, the more likely it is that the transaction will not get stuck in the Mempool.
Mempool is an important part of the blockchain. The waiting area allows you to create an idea of traffic congestion and predict the waiting time. Experienced Bitcoin miners and traders can even estimate the amount of fee that will need to be made for a successful transaction.