The Bitcoin network is currently experiencing yet another round of congestion, as evidenced by a backlog of about 393,000 transactions that dates all the way back to April and has not yet been cleared. Willy Woo, a well-known Bitcoin on-chain expert, notes that the mempool, which serves as a “waiting room” for unconfirmed transactions on the blockchain, is currently at its highest level in Bitcoin’s history.
James Check, Lead Analyst for Glassnode, claims that this increase in congestion is related to the rising demand for inscriptions, which has been primarily made popular by Bitcoin Ordinals. Inscriptions give blockchain users the ability to store their images, words, or audio data on the public ledger, much like NFTs do.
Although the fees are considerably lower than they were during the early May Ordinal craze, Check points out that since then, the Bitcoin network hasn’t been able to clear its mempool. Inscriptions make up between 50 and 60 percent of all confirmed transactions, he continues, considerably adding to the network’s load.
Woo says he prefers high transaction charges even though he presently pays a $7.50 transaction fee. He thinks that eventually, the only source of security for the Bitcoin network will be transaction fees. He also emphasises how Layer-2 solutions, such as the Lightning Network, must scale up during times of high fees because these fees are now reducing the Lightning Network’s efficiency for smaller transactions.
While highlighting the improvements in blockchain efficiency achieved by developers since the 2017 congestion, Woo also raises important concerns about potential future situations of congestion, particularly during bull markets. The author ends by making the following forecast: “Lightning may take up some of the load, but [we’ll] also start to see some payment frauds as a result.”
