At the beginning of this week, the bitcoin blockchain ceased the production of blocks for just over an hour. There was a 64-minute gap between blocks number 532146 and 532147. Normally, in the span of that time, about 6 blocks would be generated and incorporated into the chain, according to a report by Ambcrypto. Unsurprisingly, with the production of blocks slowed down, the mempool–the “memory pool” of bitcoin transactions that have been verified by nodes on the network but which are waiting to be picked up and included in subsequent blocks–grew substantially. The mempools of the BTC blockchain were reportedly blocked up with close to 18,000 transactions around the time of the blockage. Ultimately, there was a unique impact on the price of BTC during this time, too.
Sharp Spike in BTC Price
The backlog of transactions to be added to blocks happened to coincide with a sharp increase in the price of BTC. During the 3-hour period which contained the 64-minute window above, the price of bitcoin climbed from $6387 to $6594, an increase of about 4%. Just before this, there was a period of lowered volatility for BTC; indeed, this period of low volatility was the lowest since the all-time high price of the coin several months ago.
It’s likely that many other factors contributed to the price spike of BTC, including the news that asset management firm BlackRock was considering opening up ventures into the blockchain space. Similarly, it’s probable that the rise in price happened to coincide with the temporary halting of block production simply by chance. However, as the process of stopping the production of blocks is a rare one, it’s unclear exactly what kind of an impact this might have, if any, on bitcoin’s price.
Transaction Fees Build
One effect of the block stoppage that is more easily confirmed, however, is the increase in pending transaction fees. Indeed, during the 64-minute period, total pending transaction fees on the chain grew to nearly 2 BTC, or about $12,500. The mempool grew from 0.6 megabytes to an astounding 10 gigabytes. When the price of transaction fees grows, transactions with lower mining fees tend to not be confirmed. In turn, this can further back up the mempool when more and more transactions remain unconfirmed. Miners are simply less interested in confirming transactions which will net them less money.
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