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The world’s largest cryptocurrency exchange Binance has paused Bitcoin withdrawals for the second time in the last 24 hours citing a sudden spike in the Bitcoin network gas fee.
In their latest tweet, Binance said that they have paused “large volumes of pending transactions” and that the team is working to bring back BTC withdrawals asap. Currently, as per on-chain data, there are nearly half a million pending transactions on the Bitcoin network due to high gas costs.
Currently 479,000 unconfirmed transactions on the Bitcoin network.
BRC20 tokens are exploding and with it gas fees and wait times. pic.twitter.com/joVhwiFUrL
— Lark Davis (@TheCryptoLark) May 7, 2023
The recent events brought some selling pressure on Bitcoin, whose price has dropped more than 2% in the last 24 hours and is currently trading at $28,228 with a market cap of $546 billion.
On Sunday, May 7, Binance halted BTC withdrawals for nearly 90 minutes while blaming congestion on the Bitcoin blockchain. As a result, volumes on the Binance exchange have exceeded $6 billion in the past 24 hours, five times the next platform OKX.
Binance assured investors that the funds are SAFU while adding that they are replacing the pending BTC withdrawal transactions with higher fees so that they get picked up by the mining pool. The exchange recently tweeted that its team is working to resume transactions within the next hour.
Binance said that they are also thinking to enable Bitcoin Lightning Network to help in such situations. It noted:
To prevent a similar recurrence in the future, our fees have been adjusted. We will continue to monitor on-chain activity and adjust accordingly if needed. Our team has also been working on enabling BTC Lightning Network withdrawals, which will help in such situations.
Bitcoin Ordnials Clogging the Network?
Earlier in 2023, Bitcoin developer Casey Rodarmor released a protocol dubbed Ordinals that would help mint non-fungible tokens (NFTs) for the first time. These have boosted the transactions on the Bitcoin blockchain.
As per Hayden Hughes, co-founder of social-trading platform Alpha Impact, Ordinals led to a “massive run up in network fees and congestion”. Interestingly, the use of Bitcoin Taproot, which makes transactions anonymous, surged on Sunday. Crypto journalist Colin Wu explains that “the increase in Taproot adoption means that block sizes are increasing, resulting in an increase in transaction costs”.
According to glassnode, a total of 75.77% of Bitcoin on-chain transactions used Taproot on May 7, a record high, compared to only 1.536% at the beginning of the year. The increase in Taproot adoption means that block sizes are increasing, resulting in an increase in transaction… pic.twitter.com/dFP9KmO80s
— Wu Blockchain (@WuBlockchain) May 8, 2023
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