Mempool and How It Works: A Comprehensive Guide

What Is a Mempool?

A mempool is the waiting area on a blockchain node where unprocessed transactions are stored. Transactions queue here before they are added to the blockchain. The term "mempool" is a blend of "memory" and "pool."

Bitcoin pioneered the mempool concept, which was later adopted by other blockchains like Ethereum. The mempool is fundamental for keeping transaction processing orderly and efficient in decentralized blockchain networks.

The Role of the Mempool in Blockchain Transactions

The mempool is essential to blockchain node operations. Transactions must enter a block before they are finalized and recorded on the blockchain.

There’s always a delay between when a transaction is initiated and when it’s finalized. During this window, transactions reside in the mempool awaiting confirmation. This process ensures every transaction is properly validated before becoming a permanent part of the blockchain, safeguarding network integrity and security.

How the Mempool Works

When a user sends a transaction, it’s relayed to a node. The node adds the transaction to its mempool and places it in a validation queue. After the transaction passes validation, it’s marked as pending. Miners can only include pending transactions in new blocks.

Importantly, a blockchain doesn’t have a single mempool. Each node in the network manages its own unique transaction memory pool. As a result, mempool contents can differ across nodes, depending on which transactions they have received and validated.

Mempool Dynamics and the Transaction Lifecycle

1. First, you enter your friend’s wallet address, accept the blockchain transaction fee, and click send.
2. The transaction is added as a pending item in the nearest node’s mempool.
3. Next, the transaction is broadcast to other nodes in the network, but it’s not yet on the blockchain. Each node independently verifies that the transaction is legitimate.
4. When a node approves the transaction, its status changes from "pending" to "confirmed."
5. Pending transactions are selected by miners and added to a new block.
6. Miners then propagate this new block to all nodes, ensuring that every node shares information about all transactions in the block.
7. At this point, nodes still holding the transaction in their mempools remove it.
8. The transaction is complete, and your friend receives 0.01 Bitcoin.

Mempool Congestion and Backlog

Mempool congestion happens when the demand for block space exceeds the number of transactions that can fit in a single block. Several factors can lead to a mempool backlog:

• Events or News: Industry news or events—such as token launches, airdrops, or celebrity endorsements—can trigger sudden spikes in transaction demand.
• Forks or Network Upgrades: Network activities like blockchain forks or protocol upgrades can cause temporary mempool congestion while nodes update to the latest changes.
• Network Congestion: Heavy transaction volumes can strain available block space, ultimately causing mempool congestion.

This congestion results in longer confirmation times and higher fees, as users compete for limited block space.

Transaction Fee Management and Prioritization

The primary factor determining transaction execution order in the mempool is the fee attached to each transaction. Miners and validators are incentivized by profit and can choose which transactions to add to new blocks. Naturally, they favor transactions with higher fees.

As a result, the fee associated with a transaction directly affects its chances of being included in a block.

This fee-based model creates a competitive market in the mempool, highlighting the need for effective transaction prioritization. Users must decide between paying higher fees for faster settlement or lower fees with longer wait times.

Mempool Synchronization and Block Space

The mempool doesn’t need to maintain an exact list of all transactions waiting to be included in a block. It does, however, need to recognize transactions that have already been added to the blockchain so it can remove them.

When a new block is broadcast to the network, nodes synchronize their mempools while verifying the block’s content. This ensures that processed (mined) transactions are removed, and only unprocessed ones remain in the mempool.

This synchronization process is crucial for network consistency and ensures all nodes have an accurate view of pending transactions.

Mempool Size and Eviction

Each transaction in the mempool is a data fragment of a few kilobytes or less. The total byte count of all transactions forms the mempool size. A large mempool means many transactions await confirmation.

The mempool doesn’t have a universal maximum size, but nodes can set their own limits—typically 300MB for Bitcoin. Once the mempool reaches this threshold, nodes may enforce minimum transaction fees. Transactions with fees below this threshold are evicted from the mempool.

Eviction helps prevent the mempool from growing too large and keeps nodes running efficiently, even during periods of intense network activity.

Mempool in Bitcoin and Ethereum Networks

Bitcoin

All valid transactions sent on the Bitcoin network wait in the Bitcoin mempool before being added to the blockchain.

Originally, Bitcoin transaction fees were calculated as satoshis per transaction byte. This changed with the SegWit upgrade—now, transactions in the mempool are measured in weight units.

After the upgrade, Bitcoin blocks can hold up to four times more transactions. This increased capacity has helped reduce congestion and lower transaction fees during normal network activity.

Ethereum

Like Bitcoin, Ethereum originally used its mempool as a temporary space for transactions waiting to be added to a block. However, while Bitcoin’s block size is limited by data size, Ethereum’s is limited by gas fees.

After Ethereum transitioned from proof-of-work to proof-of-stake, the network introduced the concept of the block builder.

A block builder is a third party that aggregates transactions and creates optimized bundles for new blocks. They do this by reordering or bundling transactions from the memory pool.

As with other blockchains, the more you pay in Ethereum fees, the more likely your transaction will be confirmed quickly.

Mempool: The Core of Decentralized Transactions

The mempool is an essential component of blockchain transactions. It acts as a waiting area for unconfirmed transactions until they’re validated and added to a new block. For cryptocurrency users aiming to optimize transaction processing and manage backlogs, understanding how the mempool works—including transaction queuing, validation, and fee prioritization—is crucial.

With a clear grasp of mempool operations, users can make better decisions about when and how to transact, balancing speed and cost according to their needs.

FAQ

What is a Mempool? Why is it important for blockchains?

A mempool is a temporary holding area for unconfirmed transactions before they’re added to the blockchain. It validates transactions, prioritizes them by fee, maintains network security, and boosts efficiency by preventing double-spending.

How do transactions enter the mempool, and how are they prioritized?

Transactions enter the mempool when submitted and await validation. They’re prioritized by transaction fee (higher is better), size, age, and contract complexity. Miners pick the highest-fee transactions to maximize profits.

How does mempool congestion affect transaction fees and confirmation times?

Congestion raises fees and slows confirmations. High-fee transactions are prioritized, while low-fee ones may be delayed for weeks or longer.

How can you view and monitor pending transactions in the mempool?

Use a blockchain explorer or mempool monitoring tool to see pending transactions in real time. Filter by gas fee, address, or status. Some platforms offer notifications for specific transactions, letting you track network activity and fee trends directly.

Does the mempool have size limits? What happens when it’s full?

Yes, mempools have size limits. When full, nodes may run out of memory and can’t process new transactions, reducing overall network capacity.

What is the role of gas fees and transaction priority in the mempool?

Gas fees determine processing order. Higher-fee transactions are prioritized for faster confirmation, while low-fee ones may wait longer or be dropped if the network is congested.

How does the mempool work differently across blockchains like Bitcoin and Ethereum?

The Bitcoin mempool only stores unconfirmed transactions with size-based fees. Ethereum’s mempool is more complex, handling smart contract transactions with dynamic gas and MEV. Each blockchain’s structure and prioritization mechanisms are unique to its design.