Ever made a crypto transaction? If so, there was probably some delay. During this delay, the transaction was still unconfirmed, in the mempool. This mempool is can be compared to a waiting room.
The mempool (short for memory pool) is a crucial element in sending and receiving crypto transactions. It is a database of transactions that have not yet been confirmed or are currently being processed. In this article, we will take a closer look at how transactions are processed and what exactly the mempool is all about.
What does the mempool do?
A mempool is an important part of how a blockchain node works. We'll try to explain this as simply as possible.
Every transaction must be confirmed in a new block on the blockchain. But, not just anyone can create a new block. On proof-of-work blockchains like Bitcoin, miners create new blocks. On proof-of-stake blockchains like Ethereum, this is done by validators. Only when such a validator or miner confirms the new block with transactions, then the transaction becomes final. In the meantime, the transaction sits in the "waiting room" waiting for a validator or miner.
So there is not one mempool: for example, Bitcoin and Ethereum already have separate mempools. And the nodes within the network have mempools. Just Bitcoin already has thousands of mempools - which are always supposed to be equal to each other. At mempool.space, they have created a visualization of the Bitcoin mempool, which also gives a prediction of the time until the next block.
When does a transaction enter and exit the mempool?
The moment someone initiates a new transaction, it arrives at a node. This node signals to the other nodes that there is a new transaction in the mempool, so everyone can update their mempool so they all have the same data.
The transaction is first given the queued status. It is not on the blockchain, yet. Nodes in the network will check if it's a valid transaction: for example, is there enough balance to complete the transaction? In addition, they look at:
- Does it comply with the current protocol?
- Is the receiving address valid?
- Is the signature valid?
- Is the crypto not being duplicated?
If everything is correct, the transaction gets a new status: pending. Now the pending transaction waits to be put into the next block. The recipient will only receive the transaction once it has been confirmed in a new block. At this point, the transaction is removed from everyone's mempool.
Tracking a transaction
When people buy or sell crypto at a crypto exchange such as Bitvavo or Coinbase, these transactions are usually combined with other customers' transactions. By bundling multiple transactions on their platform into one, they can keep the cost per user low. The downside to this, is that the specific transaction cannot be identified in the mempool or even on the blockchain.
With Blockrise, on the other hand, each individual transaction is recorded on the blockchain. This makes it very clear to verify where the transaction is: still waiting in the mempool, or already confirmed in a block.
The information provided in our articles is intended solely for general informational purposes and does not constitute (financial) advice.