Attention has been drawn to the latest uproar by Bitcoin holders/traders on the Binance exchange following the recent hitches in the withdrawal function, which the company has attributed to too much network traffic. Due to this network congestion, the company announced it would temporarily halt Bitcoin withdrawals. According to CoinGecko, Bitcoin was marginally up at writing, rising by less than 1% to over $29,000.
Mempool.space has also said that there were approximately 395,000 unconfirmed Bitcoin transactions in the network’s mempool as of Sunday afternoon. This situation has given rise to longer processing times, and higher transaction fees have been recorded as some of the implications of this network congestion for most traders making Bitcoin transactions.
The report said that Binance had halted Bitcoin withdrawals to restore normalcy until the network congestion subsides. Meanwhile, it was gathered that the exchange had assured users that their monies were secure and would be credited as soon as the network congestion is resolved.
According to data from YCharts, the average charge for a Bitcoin transaction reached its highest level in almost two years on Friday. This situation has compelled some consumers to pay more to have their transactions processed faster. In response, there has been an increase in transaction costs due to this situation.
Meanwhile, some users have started questioning whether Bitcoin can scale as a payment system due to the high transaction costs and network congestion. It was also gathered that unlike conventional payment systems like Visa, which can process thousands of transactions per second, Bitcoin’s current transaction processing capacity is limited to about seven transactions per second.
Bitcoin Transaction Surge, As Binance Continue To Seek Solution
The Lightning Network is a layer-two scaling solution that enables quicker and less expensive transactions. The Bitcoin community has been working on ways to alleviate the scalability issue. The Lightning Network is still in its early phases of development and acceptance, so it still needs to be determined whether it will be useful in resolving Bitcoin’s scaling problem.
Although the network is now congested and transaction costs are high, Bitcoin is still the most preferred value storage destination for investment assets. Recall that the cryptocurrency’s price has increased significantly over the past year, rising from about $10,000 in July 2020 to $29,000. So, the reason for a massive profit-taking is far-fetched.
Investigation into the development reveals that some customers have started questioning the usefulness of Bitcoin as a payment system because of the high transaction fees and long processing times. Despite these difficulties, Analysts say that there is still strong optimism among Binance customers, although some of them somehow believe that it is a delay tactic by the company to reduce the extent of profit-selling activities.