In a much-awaited development, the Bitcoin Network starts to clear congestion, resulting in a significant drop in onchain transaction fees. Over the past few weeks, users and traders alike have been frustrated by exorbitant fees and slow transaction confirmations, but recent improvements in the network have brought some much-needed relief.
Bitcoin, the world’s most popular and valuable cryptocurrency, has faced scalability challenges as its user base has grown rapidly over the years. With increased transaction volume, the network struggled to keep up, leading to longer confirmation times and higher fees. However, recently these problems have been going down.
Reduction in Unconfirmed Transactions and Onchain Fees Signals Improved Performance
On May 7, 2023, the Bitcoin network faced a critical issue with an overwhelming backlog of 500,000 unconfirmed transactions, leading to a severe bottleneck within the system. However, there is positive news on the horizon as the Bitcoin Network starts to clear congestion, resulting in a significant decrease in onchain fees, which have now dipped below $5. Presently, there are slightly over 300,000 unconfirmed transactions awaiting confirmation, with 185 blocks remaining to clear the backlog.
Gradual Subsiding of Bitcoin Backlog Indicates Positive Progress
Bitcoin has dominated discussions recently as it wrestles with the challenge of accommodating the increasing demand for block space. Merely four days ago, the mempool, which serves as the queue for unconfirmed Bitcoin transactions, reached an unprecedented milestone, surpassing 500,000 unconfirmed transfers awaiting processing.
Bitcoin Demand Surges, But Backlog Gradually Clears, Resulting in Significant Fee Reductions
The recent surge in demand for block space, driven by the growing popularity of Ordinal inscription and the emergence of the BRC20 token economy, has led to a substantial backlog in the Bitcoin network. However, as of 7:00 a.m. Eastern Time on May 11, 2023, the number of unconfirmed transactions has decreased to just over 300,000.
Fortunately, the backlog is gradually clearing, resulting in a noteworthy decline in onchain fees. Merely a few days ago, on May 8, the average transaction fee soared to $31 per transfer. However, as of today, a high-priority transaction at 7:00 a.m. (ET) costs a mere $3.00.
The reduction from $31 to $3 per transaction represents a remarkable drop of over 90%. Moreover, recent statistics indicate that a low-priority transaction costs just $2.23, while a medium-priority transfer is priced at $2.65 per transaction. Additionally, the average block times have been consistently below the ten-minute mark, with an average of eight minutes and 28 seconds and nine minutes and 57 seconds.
Global Hashrate Remains Stable as Difficulty Adjustment Looms
The global hash rate, a measure of the total computing power dedicated to mining Bitcoin, is maintaining its stability at 342 exahash per second (EH/s). Current estimations indicate that the network’s difficulty level may undergo an increase in the upcoming week, specifically on May 18, seven days from now. The projected difficulty rise is anticipated to range between 0.1% and 1.94%.
Enthusiasm Grows as Bitcoin Becomes More Accessible
Bitcoin enthusiasts and market participants have greeted this positive development with enthusiasm. Many believe that the clearing of network congestion and the subsequent decrease in fees will make Bitcoin more accessible and user-friendly, further bolstering its adoption. Additionally, after Bitcoin Network starts to clear congestion, the reduced fees may attract new users who were previously deterred by high transaction costs.
In conclusion, the Bitcoin network has made significant progress in clearing its congestion and reducing onchain transaction fees. As a result, users can now enjoy significantly lower fees and faster confirmations, enabling Bitcoin to be used more effectively as a medium of exchange. While challenges still lie ahead, these recent developments signal a positive step forward for the world’s leading cryptocurrency.