Bitcoin traffic jam
Your transaction should have arrived by now, and you start panicking. It usually takes 15 minutes! Well, except this time it got stuck in a traffic jam.
This is going to be a little bit technical but bear with us. By the end of this post, you will perfectly understand what’s happening.
As an investor, you probably know that Bitcoin is based on a blockchain, a distributed ledger recording every single transaction since the very beginning. The computers running the network and registering these transactions are called miners. They take the transactions as the input and package them together into something called a block. A transaction is executed when it becomes part of a block.
Imagine the Pony Express delivering mail from Missouri to California. Delivering them one piece at a time wouldn’t be economical, so they are packaged together.
But the size of these blocks is limited (just as the size of a Pony Express wagon). A transaction often needs to wait until a miner picks it up and includes it into a block — in the meantime, it sits in something called the mempool. The mempool usually has less than 30,000 pending transactions waiting to be processed. This is the “normal” traffic on the Bitcoin network, and this means sending and receiving Bitcoin takes less than 20 minutes.
But when too many people try sending Bitcoin, transaction times are much longer. November 13th was one of the worst days with 162,000 transactions stuck in the mempool. At the time of publishing this post, on December 7th, there are 180,000 of them to be processed. Waiting times are often as long as 8–12 hours or even more.
Imagine the Missouri post office overflowing with mail. There’s simply not enough space in the wagon, so some of them need to wait.
Transactions in the mempool are not processed in chronological order. Miners are rewarded by the mining fees of all the transactions included in the current block, so they are incentivized to pick up the orders with high transaction fees first. It’s a little bit like standard mail vs priority mail!
Some wallets let you adjust this network fee, but at Exodus, we prioritize speed over cost; your transactions are always at the front of the queue. This is especially important when the congestion is this bad, as low network fee transfers can simply fall out of the mempool, and they never go through. These are eventually returned to the sending wallet, but this often takes a long time — you effectively lose control over your assets for days, which can be really inconvenient on a volatile market.
Unfortunately, there’s little you can do when the network gets this congested, but you don’t need to panic either. Your funds are safe, as always. They are just working their way through the traffic jam.
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