Bitcoin is praised for its decentralized payment system, which brings financial freedom to an international audience. However, it has also been criticized for its congestion, which poses challenges.
In Q2 2023, many complaints arose about the fees and congestion on the Bitcoin blockchain.
Speaking about this weakness at the Bitcoin 2023 Miami event, Tony Gallippi, co-founder of Bitpay, said that the congestion experienced on the Bitcoin network in 2023 is not a new phenomenon and has been observed since 2017.
He added that the result of the congestion is that users are struggling to confirm payment for their transactions as they wait for their transactions to be confirmed, which takes hours and even days when the network is congested.
A mempool, short for memory pool, is a temporary storage space for unconfirmed transactions on a blockchain network. It is used to store transactions that have been broadcast to the network but have not yet been included in a block.
When a new transaction is created, it is broadcast to all nodes on the network. Each node then verifies the transaction to ensure that it is valid. If the transaction is valid, it is added to the node’s mempool.
The co-founder added that another factor that affected the hike in fees was the poor infrastructure in the wallets of that era. These “wallets in the ecosystem didn’t really have good fee estimations at that point,” which is the direct opposite of what is seen today.
He noted that the congestion on Bitcoin today has improved. One way this has happened is that today, users can see transaction fees on Bitcoin and decide to “either choose to maybe delay the purchase or pay a different way.”
Jack Jia, Head of Unlimint, responded to Ken Kruger, creator of Moon, stating that his experience with crypto and Bitcoin users differs from Tony’s. “On my side, we’re onboarding new users for the first time,” who are asking for support tickets because of the delay in the completion of their Bitcoin transaction.
Jack also noted that the negative situation of delayed payments and high network fees users experience on the Bitcoin blockchain has also resulted in an increased number of transactions being processed through the Lightning network.
He believes this is good for the entire ecosystem. “If you’re buying 50 bitcoins and you’re paying $4 in fees or sometimes $20, suddenly it doesn’t make sense.”