The Bitcoin network is experiencing unprecedented congestion. Meanwhile, Binance has restarted Bitcoin (BTC) withdrawals after a second pause. Also, a statement came from Changpeng Zhao, CEO of Binance. Here are the details…
Binance reopens transactions
As we reported on Kriptokoin.com, Binance briefly stopped Bitcoin withdrawals for about two hours yesterday evening, as the number of unconfirmed transactions reached a record level. The second stop this morning also took a little over two hours. Binance used the following statements in a tweet:
We’ve adjusted our fees to prevent a similar incident from happening again in the future. We will continue to monitor on-chain activities and adjust accordingly if necessary. Our team is also working to enable BTC Lightning Network withdrawals to assist in such situations.
To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed.
Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.
— Binance (@binance) May 8, 2023
The number of unconfirmed transactions, which was around 400,000 when the first pause occurred, was approaching 500,000 when the second pause occurred. That number has now started to drop and is now just over 430,000 in a 12 hour period.
Changpeng Zhao: In the bull market of crime
Meanwhile, a statement came from Changpeng Zhao, the CEO of Binance. CZ quoted a tweet claiming that Bitcoin is “unusable”. He wrote the following statements on the tweet he quoted:
Gas prices fluctuate and rise, transactions hang, fees rise, people complain. That’s the bull market issues… On the positive side though, [crypto] is faster and cheaper than fiat money.
https://twitter.com/cz_binance/status/1655441114877362176
A summary of what happened: Lightning Network integration on Binance
Binance has increased BTC withdrawal fees in response to the significant backlog of pending transactions on the Bitcoin Blockchain. As we mentioned above, the exchange suspended Bitcoin withdrawals for about an hour. Pending Bitcoin transactions refer to transactions sent by users but not yet added to the Blockchain by the network’s miners. Unconfirmed transactions are in Blockchain’s “mempool”, which recorded the highest number in its 14-year history with 444,000 on Monday morning.
In times like these, when demand for Bitcoin block space is competitive, miners prefer to prioritize transactions with higher fees added. However, Binance did not account for the increased demand, resulting in longer withdrawal times. The average transaction fee has increased nearly fivefold since March. Thus, it reached its highest point in the last two years. Data from YCharts shows that the current transaction fee has skyrocketed by 789 percent compared to the same period last year. This increase is thought to be caused by Ordinals and BRC-20 mintings. Binance said it is also working to enable Bitcoin withdrawals on the Lightning Network. The exchange plans to issue a new update after all pending transactions are completed.
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