What is a Mempool and why does it matter?

A mempool (short for memory pool) is a collection of all cryptocurrency transactions awaiting verification and confirmation which will be included in the next block. Whenever a transaction is channeled to the network, it first gets verified by the nodes available. (i.e. computers participating in the network). After it successfully passes verification by a node, it sits inside that node’s “Unconfirmed Transactions” area called the “Mempool”.

Mempool is the node’s maintaining and restraining area that focuses on transactions awaiting approval. When one transaction gets verified and included, the next one is in line to get added. The Mempool is basically the node’s holding area for all the pending transactions. Each node has a different capacity for storing unconfirmed transactions and this results in the processing time of each blockchain.

Why does it matter?

The collection of these transactions is called a “block” and once the math problems are resolved, it gets added to the cryptocurrency´s blockchain. Once the Mempool reaches full capacity, the nodes start prioritizing transactions by setting up a minimal transaction fee threshold. Transactions with a lower rate than the threshold are immediately removed from the Mempool and only new transactions with a large enough fee are allowed access to the Mempool. In other words, if new transactions arrive at a higher rate, a “traffic jam” will occur and transactions will take longer to get approved (depending on their size and attached fee).

The Mempool is a very important part of the network. It allows users to understand how crowded the network is and if there are “transaction traffic jams” which result in slower confirmation times and higher fees.