Executive Summary: What Is Blockchain Network Congestion?
In this article, I explain what blockchain network congestion is, what causes it, and its effects like increased fees and delays. I analyze real cases of congestion on Bitcoin and Ethereum, and potential solutions like layer 2 and sharding.
Summary: Blockchain network congestion occurs when transaction volumes exceed the capacity of a blockchain, causing increased wait times, higher fees, and reduced reliability.
What blockchain congestion is:
- When transaction volumes exceed a blockchain's capacity.
- Leads to backlog of unconfirmed transactions.
Causes:
- Limited transaction throughput due to constraints like block size.
- Sudden spikes in activity, such as popular token launches.
Effects:
- Increased wait times for transactions.
- Exponentially higher fees as users compete.
- Impacts availability and security.
Congestion on Bitcoin and Ethereum:
- Both saw congestion during peak hype cycles with long wait times.
Solutions:
- Layer 2 protocols, sharding, tweaks to block size and time.
- Critical for improving blockchain scalability and adoption.
Full article:
What Is Blockchain Network Congestion? | CoinMarketCap
Learn about blockchain network congestion, its causes and consequences in this article. Discover how layer 2 protocols, sharding and other solutions can solve the blockchain congestion issue.
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