Bitcoin Forum

Guys,

would you consider the increasing mempool as an indication that the transactions on bitcoin are increasing or would be the price for a tx a better indication?

Thx for your thoughts

The mempool is a fine indicator, but we can read the network in order to have the exact number of transaction that there currently are, at any given time... "X transactions on the network" is more humanely understandable than "X MB reserved for mempool" when we want to know the number of transactions that exist.

use mempool.

the reason to not use tx fee as the indication is that the tx fee is no longer 'reactive' but instead its now 'averaged'
meaning if a time period had 2500 transactions then the next time period had 0 transactions. the 'estimated fee' would go down due to low demand on the old 'reactive' metric. but due to 'averaging' the tx fee remains high even when theres no transactions waiting

here ill show you.
imagine the demand was average.. a block can take 2500tx and is happily seeing 2000tx. and lets say for 24 blocks people pay 0.0001 just for the sake of it.

now imagine the next block(25th) averaged 0.00250 fee due to a fee war maker. even when tx demand is low.. .. here is the results of what the "average" metric does to the estimated fee, simply due to one block with a high fee, triggering it

https://i.imgur.com/VCsbAiH.png
EG
block26 is not 0.0001 again. instead it goes up to 0.000196 due to 1-24 at 0.0001 and 25th at 0.0025
block27 goes up goes up further because theres only 23 blocks at 0.0001, a block at 0.0025, and now a block at 0.000196 swaying the average up
block27 goes up goes up further because theres only 22 blocks at 0.0001, a block at 0.0025, and now 2 blocks over 0.000196 swaying the average up

so even without actual tx's waiting.. the fee estimator (fee war game) is causing issues unrelated to actual transactional demand.

note. the example above is not the code concept of bitcoin. its a demonstration that averages rather than reaction to demand, can affect the price and has little to no correlation to demand

mempool is an antispam feature that it organize the transaction in order of priority (fees).
it regulate the using of network by cut down the spam transactions because of low fees rigid strategy.

but yes, if mempool is full ... people need more transactions at the end.

but ... the network must have an indicator.
network is not unlimited.

have you spend 1 time per day, your income ?
no.

In terms on number of confirmed transactions, you have available data, so no need for indicators:
https://blockchain.info/charts/n-transactions

If you're interested in total number of txs, both confirmed and unconfirmed, then the size of mempool could be a good indicator, but you have to be aware that this data can be unreliable ie. when some miners decide to mine empty blocks, or when there's zero-fees txs spam attack etc.

Increasing mempool. The mempool contains all the unconfirmed transaction and it would indicate that there is a higher flow of transactions in the network. However, it is impossible to record all the transactions in your mempool and you would need to have a lax policy.

Bitcoin has a fixed block size. If about 1000 transactions were to pay 0.0005BTC/kb for the transaction and assuming that the 1000 transactions were to fill up the block, users will have to increase their fee. However, if 10000 transaction were to pay 0.00001BTC/kb, users do not have to increase their fees significantly since they are not really competing.