What's a mempool and how does it work?

Sometimes, you may notice a delay when executing a crypto transaction, like transferring tokens to a particular wallet address.

Mempool: Overview

A mempool (short for memory pool) is a temporary storage area for unconfirmed transactions on a blockchain network. It is a sort of waiting room where transactions wait to be included in a block and added to the blockchain.

When a user sends a cryptocurrency transaction, it is first broadcast to the network. The transaction is then stored in the mempool of each node that receives it. The nodes then validate the transaction to ensure that it is valid according to the blockchain's rules. If the transaction is valid, it is added to the mempool of the node.

The mempool is sorted by the fee that the sender paid for the transaction. Transactions with higher fees are more likely to be included in a block sooner than transactions with lower fees. This is because miners are incentivized to include transactions with higher fees in their blocks, as they will earn more money in transaction fees.

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When a miner creates a new block, they select the transactions from the mempool that will be included in the block. The transactions that are included in the block are then removed from the mempool.

The mempool is an important part of the blockchain network. It allows transactions to be stored and validated before they are added to the blockchain. The mempool also helps to ensure that transactions are processed fairly and efficiently.

Sometimes, you may notice a delay when executing a crypto transaction, like transferring tokens to a particular wallet address. Your delayed transaction is normally held in a “mempool.” But what is it? Well, you will learn everything about a mempool in this guide. Please continue reading. We can describe a mempool as a waiting room for keeping unmined transactions. All pending transactions are stored in a mempool before being included in a blockchain.

Bitcoin, the oldest and the biggest blockchain was the first to introduce the mempool concept, which was later adopted by other top networks like Ethereum and Solana.

Mempool Role in Crypto Transactions

For your transaction to be executed, it must be approved by a validator or a miner. But this does not occur instantly. Most times, there is a delay between when you initiate the transaction and when it’s completed. And that’s where a mempool proves helpful, as it stores your transaction until it’s confirmed and added to the network. It is important to mention that all leading blockchains have more than one mempool.

Mempool Transaction Lifecycle

To better understand the mempool transaction lifecycle, let’s use an example. Assuming you want to transfer 1 ETH to a friend, here is the process that the digital asset will undergo to reach its destination:

Step 1: First, you have to initiate the transaction by entering the wallet address of your friend in the “Withdrawal” tab, along with the amount of ETH tokens to be sent, then press “Send.”

Step 2: Your transaction will then be added to a mempool, and its status will change to “Queued”

Step 3: After that, blockchain nodes will be able to see the transaction to verify its authenticity before adding it to the blockchain.

Step 4: If a node approves the transaction, then its status changes to “Pending.”

Step 5: A validator/miner picks the pending transaction and adds it to a block.

Step 6: The block with your transaction then gets broadcasted to nodes to complete the transfer process.

Step 7: Your friend’s wallet receives the 1 ETH.

Mempool Backlog and Congestion

Congestion in mem pools is common. It happens when users initiate more transactions than the required number for a single block.

What causes a mempool backlog? Several factors, including:

Network congestion: For example, if a blockchain is witnessing massive transaction volumes, the available blocks may not be enough to include many transactions at once, thus causing congestion in the mem pools.

News or events: Developments that affect the crypto industry, such as airdrops, entry of traditional investors, and token launches, can cause transaction demand to spike, leading to a mempool backlog.

Network upgrades: When a particular blockchain wants to roll out an upgrade, it requires nodes to make some updates. During this period, congestion in mempools is likely.

Transaction Prioritization

With multiple transactions happening simultaneously, miners and validators usually prioritize transactions with high gas fees. This means for your transaction to be added to a network quickly, you must pay the highest gas fee.

Mempool Size

The size of each transaction in a mempool is measured in kilobytes, and their total size represents the size of that mempool. While there are no predetermined maximum sizes for mempools, nodes can limit the sizes of these mempools. Therefore, if a mempool reaches the limit, the node can impose a certain transaction fee to remove all transactions with fees below the stated figure. This helps to reduce congestion in the mempool.

Read More: What Is a Blockchain Bridge, and How Does It Function?

Understanding how the size of a mempool can affect transaction fees is critical as it helps you determine the right to conduct a crypto transaction. Several platforms that track mempool sizes on Bitcoin are already available. They include BitcoinTicker.co and mempool. space.

Conclusion

Mempools play a huge role in facilitating crypto transactions. Therefore, crypto users need to have a good understanding of the mempool mechanics like fee prioritization, transaction queuing, and validation.

 


DivineMercy

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Comments
Adaobi Onyeji 48 w

Good information