Tag: Transactions

Since the introduction of Ordinals onto the Bitcoin network in January 2023 there has been criticism of them clogging up the network and resulting in higher fees for users. Large image files are often shown as examples of taking the majority of the size of a block but there are a large number of text based ordinals which consume significantly less space.

I consider the transactions per second throughput of the Bitcoin network from 2021 to the present to establish if ordinals were impacting the network.

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Originally I intended only to consider 2022 and 2023 but on an initial review of the data the results were unexpected; the throughput was greater in 2023 despite ordinals being introduced. This is discussed later.

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Mean Transactions Per Second

Month	2021	2022	2023
January	13.77	8.58	8.63
February	13.41	7.96	10.27
March	14.95	8.59	12.31
April	13.12	9.36	14.97
May	10.57	8.82	31.17 (Partial)
June	9.84	8.73
July	6.33	7.90
August	7.12	8.41
September	9.47	8.93
October	8.90	7.42
November	8.64	8.91
December	8.72	8.86

Median Transactions Per Second

Month	2021	2022	2023
January	4.70	2.99	3.39
February	4.71	3.10	4.05
March	4.24	3.14	4.41
April	4.05	3.17	4.97
May	3.47	3.21	9.62 (Partial)
June	2.85	3.12
July	2.65	2.94
August	2.82	2.98
September	3.00	3.10
October	3.25	3.08
November	3.33	3.39
December	3.18	3.17

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To my surprise, the transactions per second have increased, on average, since the introduction of ordinals onto the Bitcoin network when compared to the same months in 2022. I extended my analysis to include 2021 to establish if this was consistent behaviour. The figures between 2023 and 2021 were more similar to that of 2022. I suggest that this is due to the bull market of 2021 vs the bear market of 2022 resulting in there being significantly fewer transactions on the network in 2022.

Reviewing the mempool transaction account chart on Blockchain.info lends support to this.

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Considering the results, the conclusion appears to be that ordinals haven’t negatively impacted the transactions per second throughput of the Bitcoin network, however, it must be considered that this is during a bear market. If the ordinals remain popular during the next bull market where transaction volumes increase there is a realistic prospect of the network becoming saturated leading to higher transaction fees and longer waits for users before transactions are included in a block.

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Note the above figures are based on inverting negative time values where a higher block is timestamped before the previous block. This is discussed in more detail in https://blockchainanalysis.co.uk/bitcoin-transactions-per-second-tps/. Furthermore, this is based on the embedded timestamps within the blocks which may not be accurate; see https://blockchainanalysis.co.uk/bitcoin-block-time-consistency/

In the previous post I touched upon SegWit and how it was used to fit almost 4MB of data within the 1MB block size limit present in Bitcoin.

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SegWit was introduced to the Bitcoin network in 2017 and removed (segregated) the witness data from the transactions’ inputs and moved them to a separate structure within the blockchain. This had the effect of reducing the block size requirements for transactions (and therefore the often the transaction costs) and protecting against transaction malleability.

The move also brought in a means to increase the storage potential as seen in the previous post relating to ordinals of around 3.9MB being stored on chain. This is due to a move from bytes to Work Units (wu) for calculating the size. Since the SegWit update, blocks are limited to 4 million weight units, with 1 byte in a legacy transaction being 4wu, but 1 byte in a SegWit transaction being 1wu.

Native SegWit addresses can be identified as starting bc1 on the mainnet, or tb1 for the test net. P2SH (Pay to Script Hash) addresses can also be used for SegWit transactions which start with ‘3’.

The adoption of SegWit for transactions appears pretty rapid, perhaps not unexpected given the savings made in fees by users. In 2018, approximately 1/3rd of transactions used SegWit. By 2019 this was around 43% and by 2022 approximately 87% of transactions used SegWit. Impressively, in 2023 SegWit usage appears to continue to rise with 86.5% of transactions using SegWit.

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The table below summarises the quantity and percentage of SegWit transactions each year.

Year	No of SegWit Transactions	No of Legacy Transactions	Total No of Transactions	Percentage SegWit	Percentage Normal
2009	0	32708	32708	0	100.00
2010	0	185305	185305	0	100.00
2011	0	1901765	1901765	0	100.00
2012	0	8453050	8453050	0	100.00
2013	0	19643241	19643241	0	100.00
2014	0	25263720	25263720	0	100.00
2015	0	45674023	45674023	0	100.00
2016	0	82626623	82626623	0	100.00
2017	3374215	100689014	104063229	3.24	96.76
2018	26599771	54795865	81395636	32.68	67.32
2019	51086102	68697545	119783647	42.65	57.35
2020	55179130	57374368	112553498	49.02	50.98
2021	63919480	33876973	97796453	65.36	34.64
2022	77594859	15511519	93106378	83.34	16.66
2023	14446625	2254483	16701108	86.50	13.50

Transactions per second (TPS) is an important metric when comparing Blockchains and features in the Blockchain trilemma (security, scalability, decentralisation). Bitcoin is heavily criticised for its low throughput which is often suggested to be approximately 7 transactions per second. This would equate to approximately 4200 transactions of around 250 bytes in each block (based on a 10-minute block time). This size of the transaction appears optimistic given recent average transactions, meaning the actual performance is lower.

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The Bitcoin network’s TPS is frequently compared to VISA, with a figure of 24000 oft-cited for their payment service. VISA themselves claim a capacity of 65,000 transaction messages per second (it is unclear if each transaction required more than one message). It is important to note that this is a suggested capacity of their network, not how many occur. Based on VISA financial reports, the average (mean) transaction throughput in recent years was between approximately 4500 (2020) and 6100 (2022).

But I digress…

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The typical calculation for a Blockchain’s throughput is (block size/transaction size) / block time

In Bitcoin, in its current configuration (as based on target block time), this would be (1MB / transaction size) / 600.

The transaction size on the Bitcoin network is variable and therefore this isn’t a constant. Bitcoin Visuals (bitcoinvisuals.com) assesses the average Bitcoin transaction size in recent years (2017 to 2022) to be between 455 and 636 bytes. This would equate to a transactions throughput of between 2.75 and 3.84 transactions per second based on the target 10-minute block time.

As I’ve written previously, the 10-minute block time is a target and is most frequently beaten. This has an impact on the calculation of transactions per second. There are instances where blocks are found within a second of the previous block. If the mempool (where pending transactions wait to be included in a block) is full, or near capacity at this time then the spot transactions per second value could be very high.

I reviewed the block headers for all blocks up till block 772089 (15^th January 2023) and calculated the spot transactions per second for each block. In instances where a block was recorded as being mined earlier than its predecessor, the time difference was considered as a positive value.

Since the genesis block, Bitcoin has achieved approximately 5.7 transactions per second on average. The peak value I identified was 3087 transactions per second when block 572037 (16:02:17 17^th April 2019) contained 3087 transactions, and was mined within 1 second of block 572036 (16:02:17 17^th April 2019). It should be noted that this is one of the examples where the block height is positive, but the higher block is recorded as being mined earlier than the lower block emphasising the problems with the timing on the Bitcoin network.

The highest ‘non-negative’ time was in 2020 when block 649548 contained 3058 transactions and was mined one (1) second after block 649547 resulting in 3058 tps.

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The table below summarises the last 12 years; in each of these years, there was at least one transaction a day.

Year	2011	2012	2013	2014	2015	2016
Max	140	387	652	766	821.83	1795
Block Height of Max	155293	203685	224618	323678	364691	442517
Average (Mean)	0.15	0.71	1.37	1.51	2.70	6.17

Year	2017	2018	2019	2020	2021	2022
Max	2856	2786	3087	3058	2940	2398
Block Height of Max	465972	549076	572037	649548	687073	752998
Average (Mean)	13.05	7.93	14.97	13.66	10.86	8.71

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If negative time values are ignored, rather than being inverted, the figures change slightly. These results are summarised below:

Year	2011	2012	2013	2014	2015	2016
Max	42	278	558	766	821.83	1382
Block Height of Max	133623	191425	216547	323678	364691	442239
Average (Mean)	0.13	0.61	1.23	1.33	2.33	5.88

Year	2017	2018	2019	2020	2021	2022
Max	2856	2493	3041	3058	2940	2398
Block Height of Max	465972	556417	565275	649548	687073	752998
Average (Mean)	12.07	7.25	13.30	12.81	10.37	8.54

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The increase in TPS from 2017 is expected, in part, the introduction of segwit to the Bitcoin protocol. By moving the witness data out of the block this allowed more transactions to be fitted within the 1MB block size.

Based on my previous experimentation with the accuracy of block timing where the average time between time in the block header and the time identified on my full node was 21 seconds then despite the findings above, they may not represent the throughput of the Bitcoin network. For example, if the timestamp of block 572037 was off by 21 seconds, then the TPS would go from 3087 to just 140. Still significantly higher than the expected throughput but lower than the summary figures would suggest.

During my usual browsing of various resources this morning I spotted an article on Cointelegraph entitled “You don’t see that every day: Empty Bitcoin block found”. This piqued by interest and in true ‘trust but verify’ mentality I thought I’d look into how frequently this occurs.

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The Cointelegraph article focuses on block 776,339 which was the most recent zero transaction as of the time of the article. Since then there has been another zero transaction at block 776,521.

At the time of writing (17:00 14^th February 2023) so far in 2023 there have been 13 blocks with no transactions (other than the coinbase) present in them; 770100, 770404, 770952, 771087, 773011, 773329, 773966, 774234, 774486, 774845, 775654, 776339 and 776521.

Since the genesis block, there has been a total of 89,453 blocks with zero-transactions. This is greatly influenced by the first two years which account for 88% of the zero-transaction blocks. Overall approximately 11.5% of blocks have contained no transactions, but in recent years this has been consistently under 1%.

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The table below provides the total number of zero transaction blocks per year since the genesis block.

Year	2009	2010	2011	2012	2013	2014	2015	2016
Number of Zero Transaction Blocks	32311	46489	3585	1526	420	547	1701	977
Percentage	99.45	68.45	6.01	2.80	0.66	0.93	3.13	1.78

Year	2017	2018	2019	2020	2021	2022	2023 (Partial)
Number of Zero Transaction Blocks	528	438	314	240	221	144	13
Percentage	0.94	0.80	0.58	0.45	0.42	0.27	0.19

The graph below shows the last 10 years:

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In writing this I noted that the Cointelegraph article reports that prior to block 776,339 the previous empty block was 774,486 a little over two weeks before. In analysing empty blocks I noted that there were two blocks closer to 776,339 which were empty (blocks 774,845 and 775,654). I’ve e-mailed the Cointelegraph editor and hopefully this will be corrected.

EDIT: The author reached out to me after my e-mail but as of 26th February 2023 the article remains uncorrected.