An Analysis of Transaction Handling in Bitcoin
This work addresses transaction delays and fees for Bitcoin users and miners, but it is incremental as it focuses on analysis and prediction without proposing new solutions.
The paper tackled the problem of Bitcoin's limited transaction processing capacity by analyzing transaction handling to predict confirmation times, block attributes, and block creators, finding that models performed reasonably well for block attributes but not for confirmation times or creators.
Bitcoin has become the leading cryptocurrency system, but the limit on its transaction processing capacity has resulted in increased transaction fees and delayed transaction confirmation. As such, it is pertinent to understand and probably predict how transactions are handled by Bitcoin such that a user may adapt the transaction requests and a miner may adjust the block generation strategy and/or the mining pool to join. To this aim, the present paper introduces results from an analysis of transaction handling in Bitcoin. Specifically, the analysis consists of two-part. The first part is an exploratory data analysis revealing key characteristics in Bitcoin transaction handling. The second part is a predictability analysis intended to provide insights on transaction handling such as (i) transaction confirmation time, (ii) block attributes, and (iii) who has created the block. The result shows that some models do reasonably well for (ii), but surprisingly not for (i) or (iii).