The Bitcoin network has been facing some issues with respect to transactions lately. These issues mainly related to smaller block size and increased transactions led to a backlog in transactions, making transactions take longer than usual to be confirmed on the blockchain.
Bitcoin block-size has been fixed at 1 MB since it became operational. The 1 Mb limit was set in those initial days when the number of bitcoin users was merely a handful. The idea was to increase the block size as and when the network grows. The Bitcoin network, over the past few years, has exhibited phenomenal growth. With increased users, the number of transactions processed by the network also increases, With the block size remaining unchanged at 1 MB, there is not enough space on the blocks for miners to store more transaction data. The rate of block discovery and block capacity is not keeping up with the increase in transactions. All those transactions that are waiting in a queue for their turn to be confirmed are stored temporarily until their turn comes in a memory pool.
The delay in bitcoin payments has become unpredictable. Instead of the transactions getting confirmed in minutes, it is taking hours. Bitcoin users are not used to these delays and they are worried by the recent developments. According to reports, these worries has led to over 100 percent increase in the number of support tickets raised by users with their bitcoin wallet provider or exchanges.
The current block size is gradually making bitcoin transactions less economical. Increased demand for the confirmation of bitcoin payments has led to an increase in the miner fee. Even with higher miner fee, the network congestion has caused sufficient delays for priority transactions (miners give higher priority to transactions with higher miner fee). The Bitcoin community is currently exploring different ways to solve the block size issue and they are divided about whether to create a hard fork and increase the block size to 2 MB or opt for other methods like SegWit which doesn’t require a hard fork. Either way, we should have a solution soon before the Bitcoin network gets into more trouble that it is already in.