Homework on Mempool - Questions

[alex.stahmer]

1. The Mempool stores all valid but unconfirmed transactions. Each node has a mempool, so that at a given time the mempool might look slightly different from node to node. Once a miner confirms a transaction by putting it into a block, the transaction will be removed from the mempool

2. The mempool increases. More and more transactions will stay in the mempool.

3. Fees will go up. Standard supply and demand issue. Higher demand with a stable supply leads to higher fees.

[blue]

1. a revolving collection of unconfirmed transactions
2. the mempool grows and thusly take more time to complete
3. fees increase as a competitive edge to fill the block

[anitan]

1. A mempool is a pool of valid but unconfirmed transactions
2. In this scenario the mempool would increase, and so will the transaction processing times and fees
3. The fees would increase due to competition between miners to complete and add to new block. They prioritise depending on how many satoshis per byte they can make, and not the value of the transaction

[lucavi76]

1. mempool is a place to store the transactions confirmed by the nodes but not from the minor (added in the blockchain)
2. transactions are accumulated in mempool and the number of mempool UTXOs will grow
3. increase fees

[Pacheco]

1. It is where all unconfirmed transactions are stored on a particular node.
2. The mempool will increase in size.
3. A growing mempool increases transaction fees because miners are incentived to choose transactions that offer them the highest fee in return for appending the transaction onto the blockchain.

[massam78]

1. The mempool is a place where unconfirmed transactions wait for a miner to pick them up to add to the next block.
2. If the miners can’t keep up with the rate then the mempool grows larger and there are longer transaction times.
   3.Transaction fees increase with a larger mempool because of the competition to get the transaction to the next block. Larger fees are offered to miners to get the transaction picked first.

[JovanaGG]

1. What is the mempool?
A mempool is a list of unconfirmed transactions which are held by nodes before a miner confirms the transaction.

2. What happens if the miners can’t keep up with the rate of the new transaction?
The list will get bigger, creating a supply and demand shift. Consequently, the transaction fees will start to rise as people will offer higher transaction fees to prioritize their transactions and send them towards the front of the queue.

3. How does a growing mempool effect transaction fees?
As above, the fees will increase due to the shifts in supply and demand.

[Mal]

1. It is the information about pending, unconfirmed transactions. Each node has its mempool.
2. They select those with the highest fees.
3. The highest fees are more likely to get selected by the miners for the next block.

[3duardo]

1.-A collection of unconfirmed transactions
2.-The mempool increases
3.-Higher fess

[ambient.coins]

1. What is the mempool?
   The Mempool is a full node’s holding area for all the unconfirmed pending transactions that are available for miners to pick up the unconfirmed transactions with the highest fee to byte size ratio in-order to maximize the fee income per block mined.
2. What happens if the miners can’t keep up with the rate of the new transactions?
   When miners can’t keep up with the rate of the new transactions the mempool will grow in size and the transaction confirmation time will increase.
3. How does a growing mempool effect transaction fees?
   Since miners prioritize transactions with higher priced fees, a growing mempool will cause mining transactions fee prices to increase in-order to have transactions confirmed in a timely manner.

[Mauro]

@Viktor252

1. waitingroom for all unconfirmed tx
2. tx takes more time
3. increase the price

1. A mempool is a place where each of the miners store unconfirmed transactions. Each miner has their own mempool.

2. Yes. The mempool grows, and miners need to choose what transactions to put in a new block.

3. What do you mean by price? The transaction fees will go up, as people will compete to get their transaction confirmed first.

[Mauro]

@Belle3

3. How does a growing mempool effect transaction fees?
   If you have a lot of inputs and outputs (transaction), this will waste more space in the block, so you pay more in fees.

Its true that you pay more fees if you have more inputs and outputs. Regardless of that, when the mempool grows bigger, the fees will go up no matter if you have many inputs or outputs in your transaction. People will want to compete with each other. Everyone wants their transaction to be confirmed first.

[Mauro]

No problem. As the transaction propagates throughout the network, each node updates their mempool.

[Mauro]

@Tor

What happens if the miners can’t keep up with the rate of the new transaction?
Answer: The mempool will be full. After 10 miutes space wll be freed up by blocks written the block chain. But before the Mempool reaches full capacity, the nodes start prioritizing sometransactions by setting up a minimal threshold fee.Then only tranactions with fees above the treshold will be processed. This is also an intensive for miners to work more so the mempool will be reduced through the creation of new blocks on the block chain

A mempool can in theory be full, but I don’t think it ever happened. Apparently some node implementations have a mempool limit of 300MB, but it can always be changed in their node settings. Either way, the mempool is not the problem. The miners can’t keep up because the bitcoin blocks must be limited to 1MB, and they get mined on average every 10 minutes.

[Mauro]

@Brett_Schor

3. Since transaction fees are determined by the amount of space they consume in a block, fees can go up when the mempool is full.

Mempool can grow up to 300MB in some node implementations, and that size can be adjusted in the settings. In bitcoin, fees go up when the mempool grows larger than 1MB. Why? Because at that point the miner has to choose which transactions to put and which not to put into a block. Remember that a block in bitcoin cannot be larger than 1MB.

[Mauro]

@Yovan

Transactions with higher transaction fees and smaller byte size tends to be picked by the miners first.

@jgentry

3. A growing mempool effects transaction fees in that if the representation is high, the fee is also high. However, the simpler the transaction, the smaller the fee.

Miners don’t care about the size of a transaction, all they care about is the fees. We set fees by satoshi per byte. If you have a larger transaction (meaning more inputs and outputs), as long as you set a high satoshi per byte fee your transaction will be top priority. You may ask yourself why? Let me give you an example.

Let’s say we have 2 transactions, one smaller and one larger.

First the smaller one: It has set the satoshi per byte to 3. It takes up 20 bytes of space. 20x3 = 60 satoshi.
Second the larger one: It has set the satoshi per byte to 3. It takes up 100 bytes of space. 100x3 = 300 satoshi.

Both of these are equally prioritized, as they pay the same amount of satoshi for the space taken in the block.

[Mauro]

@AliasFresh

2. What happens if the miners can’t keep up with the rate of the new transaction?

Transaction rates naturally slow down as the mempool backlog and the price per transaction increases.

Its not that the transactions slow down, its that the mempool grows faster than the transactions can be accepted. The problem is in the limited size of the blocks.

@AliasFresh

3. How does a growing mempool effect transaction fees?

The mempool size and transaction prices are directly correlated.

As you said before, the transaction fees increase. Simply because the block size is limited, so miners will prioritize the transactions they want to add into the next block.

[Mauro]

@jgentry

2. If the miners can’t keep up with the rate of the new transaction, the new transaction will never reach the nodes. The nodes therefore cannot store that transaction in the mempool and hold it until the transaction has been confirmed.

New transactions can always reach the nodes. A mempool is a place of unconfirmed transactions and its space can be unlimited. The “problem” is that the block in bitcoin is limited to 1MB. This means that they have a lot of transaction that need to be mined, so they put the ones with the highest fees first.

[Mauro]

@yestome

2. Transaction fees go through the roof like the spike that happened on Dec 15, 2017

I still remember that. I have sent transactions at that time, wondering why it was so high. I had no bitcoin fundamental knowledge back then. Glad you looked at the charts. Keep it up.

[Mauro]

Very nice answers Frank. Nicely done.