The Bitcoin network is currently experiencing a significant traffic jam with an overwhelming number of unconfirmed transactions. As of May 7, 2023, the latest statistics reveal that over 390,000 transfers are currently stuck in limbo, waiting for confirmation. The backlog is a result of the surge in minting and transferring of BRC20 tokens and Ordinal inscriptions, which have flooded the network. The Bitcoin blockchain is now hosting over 13,000 BRC20 tokens and a staggering 4.17 million Ordinal inscriptions, further exacerbating the congestion.
To clear the backlog, it would require a whopping 179 blocks to be mined. Given the average block time of 10 minutes, it would take approximately 1.24 days to mine the required number of blocks. The backlog has caused transaction fees to skyrocket by a whopping 343% over the past 11 days. As per bitinfocharts.com data, the average transaction fee currently stands at 0.00031 BTC or $8.82 per transfer.
Bitinfocharts.com further shows that the median-sized Bitcoin transaction fee currently stands at 0.00018 BTC or $5.16 per transfer. However, as per mempool.space, a low-priority fee will set you back $7.74, while a medium-priority fee costs $7.90. For those who need their transactions processed urgently, a high-priority fee of $7.99 per transfer is required.
Adding to the frustration is the current block time longer than the ten-minute average, with the last block taking over ten minutes to be discovered. Despite the backlog, some social media users are excited about the surge in activity, while others have labeled the rise of non-financial transactions as a DDoS or an attack.
The rise in unconfirmed transactions has not led to a significant increase in Lightning Network adoption. This is because it is still expensive to open and close a channel, and non-custodial solutions are few and far between. At precisely 11:07 a.m. (ET), Binance, the largest crypto exchange in the world, as measured by trade volume, temporarily halted Bitcoin (BTC) withdrawals due to the network’s congestion issue.
Binance’s team is currently working on a fix until the network is stabilized and will reopen BTC withdrawals as soon as possible. Although Bitcoin is not under attack, the anemic block size increases were not sufficient to meet demand, and Lightning did not see mass adoption. It’s time to either accept that a huge mempool and high fees will be the norm or properly increase the block size.