Binance, the world’s largest cryptocurrency exchange, had to suspend BTC withdrawals twice within 24 hours last week due to alleged network congestion of Bitcoin. A similar situation occurred in February when Binance had to halt Bitcoin withdrawals for several hours, leading to a massive price drop. However, this time there were no impacts on the Bitcoin price as the market had already been declining in recent days.
The network congestion of Bitcoin reportedly attributes to the hype surrounding the novel BRC-20 token issued through the well-known Ordinals protocol. Many believe that the demand for this token congested the Bitcoin network by initiating a large number of transactions. At one point, there were reportedly over 400,000 unconfirmed transactions in Bitcoin’s mempool.
Binance quickly responded to the situation by temporarily disabling the withdrawal function to avoid further network congestion. The company also emphasized that they never compromised the security of customer funds. Meanwhile, they reported that the withdrawal function is functioning smoothly again, and they have brought the situation under control.
The network congestion of Bitcoin is another example of how the growing popularity of cryptocurrencies can lead to problems. Scalability remains a central issue in the crypto industry for Bitcoin and other blockchain networks. Therefore, companies like Binance must collaborate closely with the developers of the underlying blockchain networks to ensure the smooth operation of their platforms and the protection of their customers.
Overall, this incident highlights the importance of being cautious when using crypto platforms and staying informed to avoid unnecessary risks.