In this post, we will talk about “What is the Bitcoin Mempool & its Significance”. Bitcoin has enjoyed quite an increased level of acceptance globally. Everyone seems to be learning about Bitcoin, asking about Bitcoin, talking about Bitcoin and most importantly, buying them. Very few indeed would have known that this digital currency would be this big so quick, now even banks, multi-national companies, commodity merchants and even the stock markets, are interested in it. Related reading, see (Bitcoin Price Predictions (Should You Invest in Bitcoins-Answered))
It may surprise you to learn that even the international governments are interested in the Blockchain technology which was birthed by the Bitcoin itself. All these are because of the ease of transfer, decentralized nature, transparency and security of Bitcoin and Bitcoin transactions.
Now I wish to throw more light on how the actual Bitcoin transactions are carried out efficiently, by the Bitcoin miners, using the Bitcoin Mempool. Related reading, see: (TOP 10 BITCOIN MINING POOLS)
What Is the Bitcoin Mempool about?
Mempool is short for the Memory pool. This part can be referred to as the “pre-blockchain” aspect of Bitcoin transactions. The Bitcoin Mempool is where all the Bitcoin transactions sit, before being confirmed and added to the Blockchain. A Bitcoin Blockchain is like the ledger containing all Blocks (Bitcoin transactions) that have ever taken place.
Each time a Bitcoin transaction is made, the Bitcoin sent is not sent or added to the Blockchain immediately, it takes at least 10 minutes or much more, depending on several factors including location, internet strength, amount of previous transactions which are to be confirmed and so on. During this time interval, the Bitcoins have not been transacted as such, but are stored in the Bitcoin Mempool.
The Significance of Bitcoin Mempool
Bitcoin transactions pass through nodes before they are confirmed. There are several nodes, and each node has its RAM capacity to hold transactions waiting for confirmation. Note the difference between transaction verification and transaction confirmation; immediately a Bitcoin is sent, you are able to see the transaction information on the Bitcoin wallet and the recipient can also see that the receipt of Bitcoin is pending. This transaction may have been verified but not confirmed.
When the size of a Bitcoin Mempool is very high compared to the memory capacity of a node, there can be a crash due to an overload of Mempool size.
Also, transactions are not confirmed according to the time they were made, someone who carried out a Bitcoin transaction in a different geographical location, may end up having their transaction confirmed before yours. This happens because the Bitcoin miners, who are responsible for transaction confirmation, have not picked your transaction from the Bitcoin Mempool yet, because of the size of the mining fee. Basically, miners prioritize the confirmation of transactions with higher mining fees, which are customizable. As long as the Bitcoin Mempool size remains low, say below the 1MB mark, transactions experience no delay, but higher Mempool size of say, 10MB means transactions with low mining fees will have to wait for 10 Blocks to be mined, before they receive the first confirmation, and for a transaction to go through, at least 3 confirmations must be made.Related readings, see: (How to Choose a Bitcoin Mining Pool)
For this reason, some Mempool transactions are tagged as “low priority” to inform the sender that transaction confirmation will take a long period. Some delays can even take days.
The solution is simple, always increase your mining fees and never carry out transactions with no mining fee if you don’t want delays.
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