Mempool: Everything you need to know

Blockchain transactions are not processed instantly; they wait for their turn in a special storage area called a mempool before being included in the blockchain. Mempool is of great importance in the functioning of cryptocurrency networks, it controls the flow of transactions and affects the speed of their confirmation.

Mempool - what it is

A mempool (“memory pool”) is temporary storage for transactions that have not been validated on the blockchain. A user submits a cryptocurrency transaction, which is then moved to a mempool where it is processed by miners (Proof-of-Work) or validators (Proof-of-Stake).

The mempool helps the network regulate load, sort transactions by priority, and avoid overloading the blockchain.

Mempool Size Calculation

The mempool size dynamically changes depending on:

• The number of unconfirmed transactions

• Maximum transaction size

• Block processing delays

For example, in the Bitcoin network, the mempool size is measured in bytes rather than the number of transactions, since each transaction has a different amount of data.

What is the role of the mempool in blockchain transactions

1. Filtering and prioritization of transactions

The mempool performs the function of sorting transactions before they are added to the blockchain. The main criteria affecting the order of processing:

• Transactions with a higher fee paid receive priority. Miners (in Proof-of-Work) or validators (in Proof-of-Stake) make money on commissions, so they are interested in including the most profitable transactions.

• Large transactions take up more space on the blockchain, so they can take longer to process.

• In some blockchains, older transactions may be prioritized to avoid them hanging up completely.

Thus, the mempool plays the role of a “queue” where transactions are prioritized.

2. Optimizing network utilization

Mempool helps the blockchain to run more efficiently by managing the flow of transactions. If every new transaction was processed instantly, it would overload the network. Mempool acts as a buffer, preventing excessive load.

Example:

• At times of high activity (such as during a bull market), the number of transactions increases and the mempool temporarily accumulates them until the network can handle the load.

• When the network is less busy, transactions are processed faster and the mempool remains virtually empty.

This allows the blockchain to function steadily even during sudden changes in user activity.

3. monitoring the state of the network

Analyzing the state of the mempool allows traders, investors and users to assess network utilization and transaction dynamics.

• The mempool is loaded - this indicates that the network has a high load, commissions may be overstated.

• Mempool is empty - it means that the activity is decreasing and commissions may decrease.

Thus, users are able to choose the optimal time to send transactions to save on commissions.

4. Ensuring network security

Mempool prevents the possibility of double spending. When a transaction enters the mempool, other nodes in the network see it and reject attempts to send the same funds again.

Example:

• If an attacker tries to send two transactions with the same coins, the network will only process one, and the second will be rejected because information about the first transaction is already stored in the mempool.

This is one of the key defense mechanisms of the blockchain.

5. Impact on transaction confirmation speed

The transaction processing speed depends on the utilization of the mempool:

• When the workload is low - transactions are processed almost instantly, even with low fees.

• If the workload is high, commissions increase and users have to pay more to have their transfers confirmed faster.

Mempool helps automatically adjust the balance between supply and demand on the network, affecting the speed of payment processing.

Principle of operation of the mempool

1. Transaction formation and sending to the network

The user creates a cryptocurrency transfer, a transaction is created, containing:

• Sender and recipient addresses - where and from where the funds are going.

• Transfer amount - the amount of cryptocurrency being sent.

• The amount of the fee (gas fee) - remuneration for processing the transaction.

• Digital signature of the sender - confirmation of ownership of funds.

2. Verification by nodes before being added to the mempool

Before a transaction is added to the common pool, network nodes perform a mandatory check:

- Whether the funds are available in the sender's balance.

- Whether the digital signature is correct (make sure that the transaction has not been tampered with).

- No double spending (double spending) - check if the user tries to spend the same coins twice.

If the check fails, the transaction is rejected and does not propagate through the network.

3. storing and sorting transactions in the mempool

If a transaction successfully passes all criteria, it is added to the mempool, but it is not processed instantly. It waits for its confirmation to get into a new block.

Processing priority depends on several factors:

• The size of the fee - the higher the transaction fee, the faster the miners will process it.

• Time of receipt - if the network is not congested, older transactions may get priority.

• Transaction size (in bytes) - large transactions may be processed slower because the block has a limited volume.

4. Transaction propagation through the network

Each node in the blockchain has its own mempool, but transaction data is distributed among all participants in the network.

• When a new node receives a transaction, it passes it on to other nodes.

• This keeps the mempools synchronized, providing up-to-date information throughout the network.

• If a transaction is already present in the network, resending is rejected, preventing duplicate data.

5. Selecting transactions and adding them to the blockchain

Mainers or validators select transactions to join a new block using the following algorithm:

1. Selecting transactions with the highest fees (to maximize revenue).

2. Checking the block size - for example, in the Bitcoin network, the block size is limited to 1 MB, so only a certain number of transactions are included.

3. Adding transactions to the new block and triggering validation (mining in PoW or validation in PoS).

When the mempool is reloaded, transactions with small fees can remain unconfirmed for a long time.

6. Confirming a transaction and removing it from the mempool

Once a new transaction block is generated, it is submitted to the network for final validation and inclusion in the blockchain.

When a block is added to the blockchain:

1. the transactions contained in it are validated.

2. they are removed from the mempool of all nodes as they are now considered complete.

3. The funds become available to the recipient.

If a transaction stays in the mempool for a long time due to low fees, two scenarios are possible:

Automatic deletion - for example, in Bitcoin, transactions can be deleted after 14 days if they were never validated.

Manual acceleration - the user can send a new transaction with a higher fee.

How a cryptocurrency transaction is formed

Any cryptocurrency transaction contains:

• Creating the transaction - the user enters the address, amount and commission.

• Signing with a private key - confirms the right to send funds.

• Transmission to mempool - nodes verify the transaction.

• Selected by the miner/validator - the transaction enters the blockchain.

• Adding to blockchain - transaction receives confirmations.

• Updating balances - recipient receives funds.

Tracking the mempool of different cryptocurrencies

To track the status of the mempool, you can use:

• Mempool.space (Биткоин)

• Etherscan.io (Ethereum)

• Solscan.io (Solana)

These services show all the onchain analytics in a particular blockchain.

Removing (rejecting) a transaction from the mempool

Sometimes a transaction gets stuck in the mempool due to low fees. Possible solutions:

• Replace-by-Fee (RBF) - resending the transaction with a higher fee.

• Child Pays for Parent (CPFP) - a process to create a new transaction with a higher fee tied to the dependent transaction.

• Waiting - if the network load decreases, the transaction will be acknowledged.

Causes of mempool overload

1. High network load due to a significant number of transactions being made

If too many users send transactions at the same time, the mempool fills up quickly and the miners do not have time to process them. This is especially noticeable during periods of hype, when the popularity of cryptocurrency increases.

Examples of congestion:

• Bull market: during periods of cryptocurrency growth, users actively buy, sell and transfer assets, which increases the load.

• Airdrops and ICOs: mass token distribution leads to a surge in transactions, especially on networks where users must confirm their participation.

• Gamification and NFT: popular NFT projects (e.g. Cryptopunks, Bored Apes) cause mass transactions on the Ethereum network, which overloads the mempool.

2. Limited block size

Each blockchain has a limited block size, which limits the number of transactions that can be processed at a time. If more transactions arrive than can fit in the block, the remaining transactions remain in the mempool, creating congestion.

Examples:

• Bitcoin: The block size is limited to 1 MB, which means that approximately 2,000-3,000 transactions can be included in the block. If more come in, the rest stay in the mempool.

• Ethereum: Instead of a fixed block size, a gas limit (30M gas per block) is used. If there is no more room in the block, the transactions wait in the mempool.

3. Network attacks (spam transactions)

Attackers can deliberately overload the mempool by sending a huge number of small transactions with minimal fees. This slows down the processing of legitimate transactions.

Examples of attacks:

• Spam attacks on Bitcoin: There was an attack in 2015 where attackers sent thousands of transactions with minimal fees, clogging the mempool.

• Ethereum attacks: Sometimes competing projects or hackers produce huge numbers of transactions to artificially raise fees and make the network less accessible.

4. Not enough miners or validators

When there are fewer miners (PoW) or validators (PoS) on the network, transactions are processed slower, leading to a buildup of transactions in the mempool.

5. Sudden drop in network complexity (in PoW blockchains)

If the complexity of the network drops suddenly (e.g., due to the exit of large miners), the network may temporarily run slower as the remaining nodes cannot handle the load.

Example:

• In 2021, China's mining ban caused Bitcoin's mining complexity to plummet and transactions to start confirming slowly.

6. Bugs in code or network updates

Sometimes blockchain developers release updates that can affect transaction processing.

Examples:

• Ethereum hardfork in 2020 caused temporary node inconsistency, causing the mempool to overload.

• Solana in 2021 experienced mempool overload several times due to bugs in the transaction processing algorithm.

7. Flash crashes and market panic

When there is a sudden collapse in the price of a cryptocurrency (flash crash), traders start selling assets en masse, causing a surge of transactions.

Examples:

• The Bitcoin crash in March 2020 caused mempool congestion as thousands of people rushed to sell assets.

• The FTX crash in 2022 caused a panic flight of investors, increasing the strain on blockchains.

What affects transaction prioritization

Miners and validators choose transactions based on the following criteria:

• Commissions - the higher they are, the faster the validation.

• Transactions - larger transactions require more space on the blockchain.

• Time within the mempool - sometimes older transactions get priority.

Mempool and scalability

Mempool congestion is directly related to the scalability of the blockchain. Some solutions:

• SegWit (Bitcoin) - increases the volume of transactions in a block.

• Layer 2 (Lightning Network, Optimistic Rollups) - moving transactions outside the main blockchain.

• Increasing block size - for example, Bitcoin Cash has blocks up to 32MB.

Conclusion

The mempool is an important element of blockchain operation. At times of high load, it can become overloaded, resulting in slowdowns and higher fees. Understanding how it works allows you to efficiently manage your transactions and choose the best time to send them.

Frequently Asked Questions (FAQ)

1. What is called a mempool in cryptocurrency?

A mempool is a group of unconfirmed transactions in a blockchain.

2. How long can transactions stay in a mempool?

The time a transaction stays in a mempool depends on the level of network congestion. Generally, this time ranges from a few minutes to a few hours.

3. How can I speed up the process of confirming my transactions?

You can resort to Replace-by-Fee (RBF) or Child Pays for Parent (CPFP).

4. Why does the mempool get overloaded?

Due to high user activity, speculative bursts, or network attacks.

5. How can I check the state of the mempool?

Via services: Mempool.space (Bitcoin), Etherscan (Ethereum), Solscan (Solana) and others.