[Current Comment] How much extra profit does transaction congestion bring?

Bitcoin memory pool undetermined transaction volume candlestick chart source: BTC.com

The Bitcoin network stipulates that one block will be packaged every ten minutes on average, and the transaction data volume of a block is limited to 1M. As the number of transactions increases, transactions in the undetermined transaction pool will not be fully packaged.

When the mining pool packages transactions, it will select according to the mining fee. Transactions with high transaction fees will be packaged in the block first. When transactions are congested, tens of thousands of transactions in the undetermined transaction pool are waiting to be packaged. In order to make their transactions packaged first, Bitcoin traders will increase their transaction fees. Correspondingly, when transactions are congested, the number of transactions with high transaction fees in the blocks packaged by the mining pool increases, and the miners' income also increases simultaneously.

The mainstream mining pool profit distribution methods are PPLNS, PPS, PPS+ and FPPS.

What are the differences in the profit distribution methods? Click to view FPPS VS PPS+.

Mining pools that use PPS+ or FPPS allocation methods will allocate mining fees to miners while allocating coinbase rewards to miners. Therefore, when transactions are congested, miners in mining pools that use PPS+ or FPPS allocation methods will generally receive higher returns. The PPS+ allocation method is related to the luck value of the mining pool, while the income of the FPPS allocation method has nothing to do with the luck value of the mining pool itself.

TiaoSir collected statistics on mining transaction fees on November 14, 2019 and November 15, 2019, and compared the mining fee income on the 14th (no congestion) and the 15th (congestion).

Click here to read the original text for Bitcoin’s mining fee data for the entire network from the 14th to the 15th. Data source: BTC.com.

Data explanation:

• The actual number of blocks refers to the actual number of blocks mined by the Bitcoin network on that day, and the theoretical value should be 144.

  
  

• The total mining fee refers to the sum of mining fees for all blocks on that day.

• Average mining fee/block refers to the average mining fee per block.

• The average mining fee/block after devaluation refers to the average mining fee after all the blocks of the day are sorted by size, the highest 5% and the lowest 5% are removed, and the remaining mining fee is the average. The average fee currently used by the mining pool to calculate revenue is the average mining fee after devaluation.

Data explanation:

rate is the PPS theoretical benefit/FPPS theoretical benefit obtained by combining the data of the entire network.

Calculation shows that when the FPPS allocation method is used, due to trading congestion, the profit on the 15th is 0.095151% higher than that on the 14th.