Homework on Mempool - Questions

Blockchain and Bitcoin 101
#2109

  1. The mempool is a record of all pending transactions that have not yet been verified by a Bitcoin miner.

  2. The mempool grows.

  3. It increases competition therefore increasing fees.

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#2110
  1. What is the mempool?
  • It is a data structure that is part of each node. It contains all unconfirmed transactions.
  1. What happens if the miners can’t keep up with the rate of the new transaction?
  • The miners prioritize, validate and add transactions with the highest transaction fees first until the block is full. The transactions with lower fees that didn’t make it will remain in the mempool until the rate drops and they are included in the blockchain.
  1. How does a growing mempool effect transaction fees?
  • It will cause higher fees as people will be incentivized to pay more if they want their transactions to be processed.
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#2111

Course: Blockchain and Bitcoin 101
Section: Bitcoin Basics

10 Mempool
11 Homework - Mempool

Notes and Research:

If you Google mempool, you will find
Johoe’s Bitcoin Mempool Size Statistics - Jochen Hoenicke

The chart shows how many transactions are unconfirmed and what kind of fees they have.
The data is separated into different fee levels given in satoshi per byte.

Satoshi per byte is a unit for measuring transaction priority, defined by the transaction’s fee in satoshi divided by the size of the transaction in bytes.

A satoshi is the smallest unit of a bitcoin currency recorded on the block chain, equivalent to 100 millionth of a single bitcoin (0.00000001 BTC). Bitcoins can be split into smaller units to ease and facilitate smaller transactions. The satoshi was named after the founder, or founders, of bitcoin, known as Satoshi Nakamoto.

You need to understand how to read the chart so that you are not an idiot.

When a wallet sends a txn, all the nodes will receive the txn sooner or later. Until a miner picks the txn up (adds it to a block), it will be unconfirmed. It will be put in a special place, the mempool.

A node will check a transaction and put it in the mempool if valid.

A Mempool consists of all transactions that are unconfirmed.

A Miner will ask nodes what kind of transactions do you have in your mempool. A Miner is also a node and may take just their own transactions.

Miners will pick the transactions with the highest fee rates (Satoshi per byte) and put as many of them as possible into the next block.

To get your transaction processed quickly, put in a high fee.

When a transaction is added to a blockchain, it is confirmed.

Fee is per virtual byte.
The larger the txn in bytes, the higher the fee.
It is not the value of the money being transacted, it is the size in bytes, that determines the txn fee.
The simpler the transaction, the smaller the fee.
The fewer the inputs and outputs, the smaller in byte size it will be.

Miners want to make money. Block size is limited.

Mempool decreases every 10 minutes then increases.

Blocks are produced with ten minute intervals.

More about fees:
They are now mandatory.
Fee rate is Satoshi divided by bytes.
Analogy: An office is so many square feet and has a rental price. Cost can be calculated as square feet divided by dollars.

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Homework on Mempool - Questions

1. What is the mempool?
The Mempool is a waiting area for unconfirmed transactions. Each full node maintains a Mempool. After a transaction is transmitted to the network, it gets verified by the nodes. As each node validates a transaction, the transaction waits in that node’s Mempool until it is picked up by a miner and inserted into a block. Transactions added to the blockchain are deleted from the mempools. This happens every 10 minutes.

2. What happens if the miners can’t keep up with the rate of the new transaction?
“If new transactions arrive at a higher rate than they are cleared from the mempool into blocks, a “traffic jam” will occur and transactions can take a long time to get approved (depending on their size and attached fee).”
Traffic jams “result in slower confirmation times and higher fees.” Transactions with low fees may be bypassed, dropped from the mempool, and returned to the sender.
Source: What is the Bitcoin Mempool? A Beginner’s Explanation (2020 Updated)
https://99bitcoins.com/bitcoin/mempool/
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3. How does a growing mempool effect transaction fees?
It’s supply and demand.
Miners have few txns in the memepool = lower fees accepted. (Take what they can get.)
Miners have abundant txns in memepool = higher fees. (Pick and chose those with highest fee rates.)

When there are many unconfirmed transactions in the mempool, the miners will process those with the highest transaction fees first. A person sending money will need to attach a higher fee if he/she wants the transaction to be confirmed and added to the blockchain quickly. If the included transaction fee is too low, the miners may bypass the transaction all together. The transaction may drop from all the mempools and be returned unprocessed to one’s wallet. This usually happens when the transaction is unprocessed for 72 hours.

A block can only contain a finite number of transactions. When there are an abundance of transactions to choose from, the miner will prioritize the transactions and choose the ones with the best Satoshi per byte (highest priority based on transaction fees, basically fee divided by byte size).

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#2112
  1. What is the mempool? it is the data set of each nodes UTXOs
  2. What happens if the miners can’t keep up with the rate of the new transaction? highest fees are prioritized.
  3. How does a growing mempool effect transaction fees? congests the network and so fees keep getting higher as people compete to have their transaction validated on the BC
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#2113

The mempool is a datastructure where all new unconfirmed transactions are located in each node’s mempool. Utxo’s are only a part of a transaction where the ownership gets changed to other addresses.

So a transaction has a list of 1 or more utxo’s in the input of the owner and change ownership by signing them to other addresses in the output. The difference of total value = fee.

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#2114

That makes sense! Thank you Fabrice!

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#2115

Utxo’s are just batches of bitcoin that you recieved that your private keys can spend to other addresses in a transaction. So if someone sends you 1btc to 1 of your addresses, this will be 1 utxo of 1 btc that you can spend

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#2116

Homework - Mempool

The mempool is the set of unconfirmed transactions available to be included in the next block by miners. It is stored in the memory of nodes on the network.

Each block has a maximum size. The mempool grows as new transactions are added at a rate higher than what can be included in new blocks.

Miners are incentivized by the fees associated with transactions from the mempool they include in a block. As the mempool grows there is additional competition between transactions that want to be confirmed in a new block. Transactions paying higher fees (satoshi per byte) are processed first by miners. So a growing mempool will result in users paying higher transaction fees to ensure timely processing of their transactions.

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#2117
  1. A mempool is a database of the (yet) unconfirmed transactions.
  2. The mempool just accumulates all the unconfirmed transaction.
  3. If you wanna ride a taxi, but there is a shortage in taxi supply), you have to raise the price you are willing to pay for the ride. If you want your transaction to be appended to the next block and the memmpool is already large enough, you have to provide a miner with an incentive to pick up your transaction by offering them higher TX fee.
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#2118
  1. Mempool is the set of unconfirmed transactions.
  2. They choose transactions with the highest fees.
  3. Transactions become more expensive.
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#2119

1 - It is a data structure that each node has. Contains a list of unconfirmed transactions. When a node receives a transaction request, first he verifies that this transaction is possible and then integrates it into its Mempool, waiting for a miner to integrate it into the blockchain.

2- Each new block is generated every 10 minutes. Miners choose the transactions with the highest fees to join the Block. Transactions that are not integrated will accumulate in the pool and it will grow in size

3- The resolution of transactions by miners is very fast. However, it will take longer for miners to confirm their transaction if the mempool is crowded. This situation leads users to pay more commissions in order to take a higher priority for miners. The higher the commission, the more likely you are to be quickly selected to process your transaction. A competitive situation that we can see markedly in the price rises of commissions when the mempools are at their limits.

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#2120

1: The mempool is a databas of the transactions that have yet to be picked by a miner.

2: If the miners can’t keep up with the number of transactions being created the mempool
increases in size.

3: A large mempool will require a juicier transactin fee to entice a miner into selecting the
transaction for the next block.

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#2121

Those are some next level answers. :face_with_monocle: :metal:

#2122
  1. The mempool is where UTXOs go while they are waiting to be confirmed and added to a block by a miner.
  2. The mempool grows gets backlogged with pending transactions (UTXOs).
  3. Transaction fees go up.
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#2123

Mempool is a list of unconfirmed transaction which are waiting for approval, it is replyed in every node, but not necessarily every node will have de same mempool at the same time cause the time that cost spreed the information

The mempool will grow in size, it will be crowed, raising the time to confirm transactions and the price of the fees.
*I’m not sure, but maybe reducing the hash rate will help to reduce the weight in binary, making the net faster and allowing it to process more transaction in less time.

As we know minners work for money, and they always will choose the transaction with higher fees, if mempool get crowded, the time to process transaction will rise, and if you want your one done quickly you will have to pay more, as we saw in last unite, wallets read the fees paid and choose a fee which will make your transaction be done in a time good enough, in this way fees will be rise, and rise…

i open this for discuss because i don’t know if it is correct: "*I’m not sure, but maybe reducing the hash rate will help to reduce the weight in binary, making the net faster and allowing it to process more transaction in less time. "

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#2124

  1. The mempool is a where all the unconfirmed valid bitcoin transactions wait until they are confirmed.

  2. If the miners cannot keep up with the rate of new transactions, longer average confirmation time and higher priority fees will result.

  3. A growing mempool will result in higher transaction fees as the miners will prioritise higher fee transactions so that they can earn a higher rate of return for their work

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#2125

  1. mempool is the special place where unconfirmed transactions are kept until they are picked by the miner for confirmation.

  2. it will lead to delay in confirmed transaction that might need an increase in transaction fee in order to become attractive to the miners to consider.

  3. because the miners depend on incentives , the try to consider transactions with good fees for confirmation. fees must be reviewed up when there is growing mempool.

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#2126

Hash rate can’t be changed because it is the measurement of all work that miners put in the network. You could change the difficulty calculation, making block time shorter. However you need consensus to achieve. It might also bring other issues along the way like more frequent accidental forks due to miners mining blocks at the same time.
There are also other coins that are forked from the Bitcoin source code that have shorter block times like Litecoin. :slight_smile:

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#2127

The mempool is where unconfirmed transactions are held before miners pick them.

The mempool is growing in size.

If the mempool is growing the fees should also be growing because miners compete to mine the transactions with bigger fees.

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#2128

For the second time in one day, thank you Alko89 for share your knowledge!

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