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Bitcoin congestion is no more: BTC network reaches record lows on awaiting transactions

source-logo  finbold.com 03 October 2023 17:27, UTC

During the last week of April, the number of awaiting transactions on the Bitcoin (BTC) network started to surge, reaching a peak in May, followed by very expensive transaction fees being charged from Bitcoin holders moving their coins.

Since then, the Bitcoin mempool remained congested with hundreds of thousands of stuck transactions waiting in line to be added to a block and confirmed by the network, in order for the sent BTC to be received at the destination.

However, things started to change six months later, in the last week of September. At the time of publication, data retrieved by Finbold from Johoe’s Bitcoin node, on October 3, shows 6-month lows for the number of awaiting transactions in the network — with only 31,000 transactions waiting in line.

Notably, the numbers were over 20 times higher than at its worst moments this year. On May 8 it reached a new high of 472,000 awaiting transactions, followed by a new high of 490,000 on August 11, and the all-time high number of stuck transactions superior to 655,000 on September 6.

It is important to say that on May 16, Johoe’s node crashed, erasing this day’s registers, which can be seen in the chart as false lows with zero transactions waiting in the mempool.

Awaiting transactions effects: Bitcoin fees and Lightning Network

Considering that the Bitcoin network operates with a very limited block size supply, the increase of awaiting transactions can also increase the demand for the available block space, which can make senders compete by outbidding each other with higher transaction fees, in order to have their transactions confirmed first.

This effect was glanced at on May 8, during the first peak of awaiting transactions, with the average paid fees going as high as $31 per Bitcoin transaction, according to BitInfoCharts.

Interestingly, the fees later remained under the $5 per transaction threshold, costing less than the price of a Big Mac worldwide.

Additionally to that, users started migrating their BTC funds to the Lightning Network (LN), in order to be able to transact off-chain, while the Bitcoin network was congested.

However, with the most recent unloading, LN stats started to drastically change, with nodes being shut down, channels being closed, and funds being retrieved for the safety of the Bitcoin blockchain.

The above monthly stats for the Lightning Network were retrieved by Finbold from Amboss, by press time. Showing 4,667 channels being closed in the past month, and 1,033 nodes being shut down in the same period — for negative changes of 6.36% and 5.76% respectively.

Despite that, the LN capacity measured in BTC has increased by 1.64%, with 80 more available Bitcoin for the network’s liquidity.