It is no secret that the world’s first cryptocurrency is a technical powerhouse. Bitcoin was developed in 2009, but the Bitcoin network is a state-of-the-art technology that executes digital currency creation and transactions. At first, the underlying technology of Bitcoin was a mystery to the general public, with most users not understanding how cryptography works in the digital world.
Today, the public has been educated on most crypto topics surrounding the Bitcoin transaction process. However, the Bitcoin mempool remains a mystery for most. In this article, we will discuss the critical role of Bitcoin mempools in transaction processing and validation for the Bitcoin network.
Key Takeaways
- A Bitcoin mempool is a storage space for unconfirmed transactions within each blockchain node on the network.
- Transactions with higher gas fees are generally executed faster due to miner incentives.
- Mempools vary in size and speed. However, the average time of transactions leaving the mempool is 10 minutes on the Bitcoin network.
- A transaction will be automatically cancelled if it is stuck in a mempool for more than 72 hours.
Understanding the Mempool Protocol
Bitcoin memory pool, commonly called a mempool, is a storage space for unconfirmed transactions. To grasp this idea perfectly, we must first understand how the Bitcoin protocols process transactions. Suppose we have a user X that wishes to conduct a Bitcoin payment. User X has to go through several steps before the processing starts.
First, user X must enter all the relevant details, including the transaction amount, address and other specific information. Once the inputs are done, user X pushes the send button, and the transaction is completed, right? In reality, it is well known that Bitcoin transactions take time to be processed, and this is where mempools come into play.
Mempools are storage spaces within the Bitcoin nodes that serve as the waiting areas for unconfirmed transactions. First, transactions must be verified as valid transactions through various checks.
Then, the miners decide which transactions to confirm through the proof-of-work (PoW) algorithm. In most cases, the correct transactions are ranked by size since larger transfers have a bigger transaction fee and produce more profits for the miners.
So, the transfer made by user X will sit patiently as a pending transaction until all of the processes mentioned above are completed. After that, the transfer will finally be executed and sent on its way.
How Mempools Contain Pending Transactions
Contrary to popular belief, a Bitcoin mempool is not a single storage device or a cloud protocol that includes all pending transactions simultaneously.
Instead, each Bitcoin node supports its unique mempool space with a varying memory size. Some nodes have a larger capacity to contain more transactions. The new node variations include light nodes with limited capacity but function much faster than the classic Bitcoin nodes.
However, to verify a single transaction, the information has to travel through all the existing nodes on the Bitcoin network. This is a strict requirement for ensuring the validity and legitimacy of new Bitcoin transactions. During this process, the Bitcoin protocol checks the address validity, sufficiency of transfer funds and other essential details to ensure the transaction is good to go.
BTC Mempool vs Ethereum Mempool
Although Bitcoin and Ethereum are completely different blockchain networks, their mempool variations are similar. Despite their core differences, a new transaction validation process functions almost identically on both blockchain systems.
It is well-known that Ethereum uses an EVM (Ethereum Virtual Machine) to curate and process transactions. Ethereum also employs smart contracts to achieve a more precise validation process that supports satisfying different conditions. For example, Ethereum automatically confirms the validity of transfer dates, transaction fees and other important variables.
Naturally, automatic verification can reduce transaction verification times significantly. However, in practice, Ethereum transactions still take a lot of time due to network congestion and a heavy use of computational power. So, despite its technological advantages, Ethereum’s mempools still take roughly the same time as their Bitcoin counterparts.
Each Bitcoin node roughly takes 10 minutes to process new transactions since it takes about 10 minutes to create a new blockchain node within the network.
How Bitcoin Mempool Functions in Practice
Moving beyond the concept of mempools, let’s discuss the actual process and what users need to know about this mechanism. In order to get your transaction through mempools quickly, you must understand the concept of maximum extractable value (MEV).
The MEV measures the maximum profit a miner can receive from validating a new transaction node. The size of MEVs directly affects the transaction confirmation times. For example, higher transaction fees for a new transfer mean the new node’s MEV will be higher. So, miners will have more motivation to validate this node ahead of the others.
Conversely, smaller transactions might be stuck in the mempool for an extended period. While this system is not ideal, the entire Bitcoin network depends on the miners to fulfil their duties, and MEV size is the perfect motivation for them.
Bitcoin even offers opportunities to increase the gas fee size and produce higher fees on a more minor transaction. This way, users can reduce the potential processing time if their transfer is time-sensitive.
What Happens to Unconfirmed Transactions over a Long Time?
So, how long does blockchain pending take within the Bitcoin network? While the Bitcoin mempool unconfirmed transactions never cause the loss of funds, they can pose significant risks for time-sensitive transfers.
If a transaction is small, or if the network is congested at the moment, some transactions might be stuck in the mempool for up to 72 hours. After that, the transfer is cancelled, and all funds are returned to the crypto wallets of respective owners.
This system is fair for all parties involved, but it can lead to devastating results regarding certainty. Mempool protocols create a sense of uncertainty in the Bitcoin network for small and mid-sized users. There is no way of knowing whether a smaller transaction ever gets processed in due time. So, users must be aware of such risks and avoid processing time-sensitive transactions that are smaller.
How to Withdraw Bitcoin from Mempool
Unfortunately, the Bitcoin mempool system does not allow the reversal of transactions. Once the processing starts, there are no effective ways to cancel them manually. However, a single modification opportunity exists to increase the gas fee amount on the transactions.
While this option will not help users who wish to cancel their transfers, it can help users increase their chances of transfer execution. As discussed above, higher fees reduce the validation times by giving miners enough motivation. However, this practice has been criticised by the Bitcoin community since it creates a pay-to-win environment within the Bitcoin network.
Closing Remarks
The Bitcoin mempool system is a handy tool for curating Bitcoin transactions and allowing the network to validate new transfers. However, Bitcoin’s current validation system requires a lot of time and depends on the miner incentives. As a result, larger transaction volumes are highly favoured to be processed. While this system may seem unfair to many, it is best to create strategies considering these factors, avoiding unfortunate scenarios of cancelled transfers.
