Last Updated on May 8, 2023 by Bitfinsider
Binance has increased BTC withdrawal fees in reaction to the Bitcoin blockchain’s massive backlog of outstanding transactions.
The leading cryptocurrency exchange by trade volume blocked bitcoin withdrawals for nearly an hour early Sunday morning, and then again later in the day.
According to a representative for Binance, the bitcoin withdrawal fee has been raised from 00002 BTC ($5.59) to 0.001 BTC ($27.94) each withdrawal.
“Due to an increase in the overall network fee on the Bitcoin network, the operational cost of maintaining withdrawals for BTC also increases,” they explained.
“There is a need to increase the withdrawal fee charged on the Binance platform for the Bitcoin network in order to ensure that users’ transactions are picked up by mining pools.”
Pending bitcoin transactions are ones that have been submitted by users but have yet to be added to the blockchain by network miners.
Unconfirmed transactions are stored in the blockchain’s “mempool,” which reached 444,000 on Monday morning, the greatest total in its 14-year history.
In times like these, when the demand for Bitcoin blockspace is high, miners may favor transactions with higher fees. Binance failed to account for demand, resulting in lengthier withdrawal delays.
Since March, the average transaction cost has increased nearly fivefold, reaching its highest level in two years. According to YCharts data, the current transaction fee has risen to $19.21, representing an astounding 789% increase over the same time last year.
The rise has been ascribed to an infusion of Ordinals inscriptions and BRC-20 mints.
Binance also stated that it was planning to facilitate bitcoin withdrawals via the Lightning Network, a layer-2 network designed to make transactions faster and less expensive, in order to assist relieve similar future problems.
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