How Does a High Volume of Zero-Fee Transactions Affect Network Congestion?
A high volume of zero-fee transactions can contribute to network congestion if the block space is limited and they displace higher-fee transactions. However, in a competitive environment, miners will generally prioritize higher-fee transactions, leaving zero-fee transactions to languish in the mempool.
If a miner chooses to include them, they occupy valuable block space that could have been used for higher-value, higher-fee transactions, effectively increasing the average waiting time for others.
Glossar
Average Waiting Time
Latency ⎊ Average waiting time quantifies the mean duration between a trade order's submission and its ultimate execution or confirmation within a market system.
Block Space
Capacity ⎊ Block space, within cryptocurrency networks, fundamentally represents the finite data storage available on a blockchain to accommodate transaction records and smart contract execution.
Network Congestion
Latency ⎊ Network congestion within cryptocurrency, options trading, and financial derivatives manifests as increased latency, directly impacting execution speeds and potentially leading to adverse selection against slower participants.
High Volume
Velocity ⎊ High volume, within cryptocurrency and derivatives markets, signifies a period of intensified transactional activity, often exceeding historical norms and indicating substantial participation.