Binance faces massive withdrawals as well as transaction fees multiplied by the latest fashionable nonsense: the BRC-20…
Traffic jam in the mempool
The world’s largest exchange blocked bitcoin withdrawals for two hours this weekend. In question, “the large volume of pending transactions” in the memory pool.
The mempool (contraction of memory and pool) is a mechanism for storing pending transactions. We often talk about THE mempool, but in reality, each node has its own mempool which can be configured differently from the others.
The transactions are broadcast by the wallets before being propagated by the nodes after verification that they contain real UTXOs and that the signatures are correct.
A valid transaction is broadcast step by step to all the nodes until it ends up in the mempool of the node of a minor who can add it to a block. Of course, miners prioritize transactions with the highest fees.
There are currently over 400,000 pending transactions. The cumulative size of these transactions waiting to be inserted into a block reaches 1 GB.
This bottleneck is such that you have to pay $4 to be able to introduce your transaction into the mempool (which is only 300 MB).
It will even cost you 550 sat/byte, or $33 per transaction, to make sure it gets through to the very next block.
Binance loses 178,000 BTC in 24 hours
Mempool congestion is a reality. But after all, Binance’s withdrawal fees are regularly higher than the actual fees (0.0002 BTC, or ~$5).
Binance could therefore have spared itself the FUD by temporarily taking over the increase in fees. Or simply immediately increase withdrawal fees as is now the case.
Another explanation could be that Binance suddenly ran out of BTC. In question, massive withdrawals having probably forced the exchange to recharge its hot wallet from its cold wallets.
Indeed, more than 178,000 BTC have been withdrawn from Binance in the last 24 hours. That’s 30% of all the BTC the exchange has had so far!
Are insiders jumping ship? »
From now on, Coinbase has the largest reserve with 486,000 BTC. Binance comes second with 400,000 BTC. Comes behind Bitfinex (355,000 BTC) and OKX (118,000 BTC).
In all, more than 158,000 BTC have left all exchanges in the last 30 days. This trend has been uninterrupted since March 2020.
According to the site coinglass, there were 2.2 million BTC on the exchanges a year ago, against 1.91 million today (-13%). Which is great news. Not your key, not your Bitcoin!
As such, note that two-thirds of BTC (out of a total of 19.4 million BTC) have not changed for a year. A record. This growing trend of investors owning their bitcoins themselves is telling. Bitcoin is increasingly becoming a store of value.
And since the bitcoin supply is fixed, there are fewer bitcoins available for purchase. This can lead to upward pressure on prices if demand increases.
Bitcoin under attack?
Mempool congestion is linked to a new project, the “BRC-20 Experiment”, in reference to Ethereum’s ERC-20 standard. As a reminder, the ERC-20s have allowed the creation of thousands of useless and harmful shitcoins.
BRC-20 is a technique for issuing shitcoins native to Bitcoin using Ordinals. And this, thanks to “registrations” housed in special transactions at the origin of the current explosion of costs.
Don’t miss our full article on Ordinal:
–Ordinal, improvement or attack?
Many feel that there is nothing to worry about. John W. Ratcliff (@jratcliff) soberly declares:
“In my view, a DDOS attack consists of flooding the network with low-cost transactions for the sole purpose of clogging the network. If some are paying dearly for their transactions, that looks more like a use case than an attack. »
It is true that it is difficult to imagine that an attacker, even a country, would be willing to spend so much money to congest Bitcoin. The bill would quickly rise.
Nevertheless, a suspicious mind will retort that all it takes is a spark to set off a self-perpetuating degen mode effect. Maximum damage for minimum cost.
They all have a size of 152.5vb for an amount of 0.00000546 BTC.
DDOS attack? »
Note in passing that another threat lurks: STAMP (Secure Tradeable Art Maintained Securely).
Like Ordinal, the STAMP protocol offers to link jpegs to bitcoin, but differently. Nodes can prune Ordinal protocol registrations, but not with STAMP, the filth of which sits directly in UTXOs.
“Data is preserved in such a way that it cannot be pruned, which preserves it immutably”To declared the mysterious creator of the STAMP protocol Mike in Space on the project’s GitHub page. The developer is already in discussions with Emblem and Hiro Wallet to allow buying and selling STAMP on OpenSea.
It is all the same a pity that the fees become exorbitant right at the time when the US banking system is crumbling. All this to popularize Jpeg scams? ..
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