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Why do some Bitcoin transactions remain unconfirmed?

Why do some Bitcoin transactions remain unconfirmed?

Why do some Bitcoin transactions remain unconfirmed?
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By CNBCTV18.com Jun 9, 2022 6:39:15 AM IST (Published)

An unconfirmed transaction — also known as a zero-confirmation — has been verified but not recorded on the Bitcoin blockchain. How and why does it happen? Read here-

On average, the confirmation time for a Bitcoin transaction is 10 minutes. This is surprisingly slow. Even old-fashioned bank transactions are processed considerably faster than this. Moreover, BTC transaction times fluctuate wildly and can sometimes take even longer than 10 minutes. On occasion, they can take hours or simply remain unconfirmed.

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These slow and sporadic transaction times can be attributed to several factors, including total network activity, transaction fees, and hash rate. If there is an increase in transaction volumes, the network becomes congested, and transactions take more time to process. Further, if some users pay higher transaction fees, they will be prioritised above the others. This could result in your transaction being delayed or remaining unconfirmed.
An unconfirmed transaction—also known as a zero-confirmation—has been verified but not recorded on the Bitcoin blockchain. To understand why it happens, let’s take a quick detour and understand how Bitcoin transactions are processed.
How are BTC transactions processed?
When a Bitcoin transaction is sent to the network, it is verified by all the available nodes. Nodes are nothing but user computers on the Bitcoin network. These computers confirm the legality of each transaction and add it to a pool of unconfirmed transactions, called a mempool. Each node has its own mempool of verified transactions waiting.
After this, miners race to complete complex puzzles and earn the right to pick up these transactions, bundle them into a block, and add it to the blockchain.
In exchange, they are rewarded with newly-minted bitcoins for every block they create and add. While there are several more intricacies and steps involved, this is the long and short of a Bitcoin transaction.
So why would transactions remain unconfirmed?
When the network is congested, several transactions pour into the mempool. At this time, the mempool begins prioritising transactions by setting up a minimal transaction fee threshold. Miners will pick up transactions that are more financially viable for them, i.e., the ones with higher transaction fees.
Therefore, during network congestions, users often pay higher fees to prioritise their transaction in the mempool. A higher transaction fee acts as an incentive for the miners to pick up that transaction. However, you might have to shell out a lot of money to jump the queue and get your transaction processed. For example, in April 2021, the average BTC transaction fee rose as high as nearly $60, coinciding with all-time highs in value, the difficulty of mining, and block demand.
Moreover, since the Bitcoin block size is limited to 1MB, each block can only carry around 1,500 transactions. Therefore, even if you pay a high fee, there is still a chance your transaction remains in the mempool as others have paid an even higher fee.
What to do when your transaction is unconfirmed?
As soon as you make a transaction, you can head to a Blockchain explorer and monitor its status. If your transaction remains in limbo longer than you are comfortable, you can do these three things:
-Be patient and wait for confirmation—sometimes, it can take a week.
-Your transaction can also expire and be removed from the mempool—wait for this to happen and then make the transaction again with higher fees.
-Replace the transaction using the replace-by-fee (RBF) method. RBF is the process of creating the same transaction with a higher fee. This helps you jump up a few positions in the mempool.
Can you speed up your transactions?
Besides increasing the transaction fee, you can also choose off-peak hours – the time when the transactions are at the lowest. Again, you can check the blockchain explorer to figure this out.
You can also use accelerators such as BTC Nitro to speed up transactions. Nitro rebroadcasts your transactions to several nodes throughout the world. It will go so far as to remind the miners of your pending transaction. And if you sign up for the premium version, you can simply get the transaction accepted by its network partners.
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