Binance Fixes the Problem Successfully, The BTC Outflow Is Less Than Reported
- Binance resumed Bitcoin withdrawals after pausing them for the second time in a day.
- The exchange said that they are also considering enabling the Bitcoin Lightning Network to assist in such instances.
- Effective outflows are anticipated to be in the 10,000 BTC range.
Binance, the world’s biggest cryptocurrency exchange, has halted Bitcoin withdrawals for the second time in 24 hours, a sudden increase in the Bitcoin network gas price. According to the latest update, the problem has been fixed, and the exchange has reviewed measures to prevent similar situations from recurring.
The exchange just announced that its staff is trying to reopen trading within the next hour.
Binance said that they are also considering enabling the Bitcoin Lightning Network to assist in such scenarios. It said:
Binance blocked BTC withdrawals for over 90 minutes on Sunday, May 7, claiming congestion on the Bitcoin network. As a consequence, the exchange volumes have surpassed $6 billion in the last 24 hours.
As the second stop occurred, the number of unconfirmed transactions was nearing 500,000, up from roughly 400,000 when the first pause occurred. It is already starting to fall, with a 12-hour average of slightly over 430,000.
Earlier in 2023, Bitcoin developer Casey Rodarmor revealed Ordinals, a system that would aid in the creation of non-fungible tokens (NFTs) for the first time. They have increased the number of transactions on the Bitcoin network.
Ordinals, according to Hayden Hughes, co-founder of the social trading platform Alpha Impact, caused a huge increase in network costs and congestion. Surprisingly, the usage of Bitcoin Taproot, which anonymizes transactions, increased on Sunday. According to cryptocurrency writer Colin Wu, the increased Taproot use implies that block sizes are growing, leading to a rise in transaction fees.
The exchange told investors that the funds were SAFU and that they were substituting outstanding BTC withdrawal transactions with higher fees in order for them to be picked up by the mining pool.
While Binance temporarily suspends BTC withdrawals, records suggest significant Bitcoin outflows.
Its real exchange outflow is far smaller since the exchange takes numerous steps, including wallet transfers and activating Bitcoin Lightning network withdrawals, before resuming BTC withdrawals.
Julio Moreno, director of research at CryptoQuant, disclosed that individuals are remarking on massive Bitcoin outflows from Binance. On Sunday, transactions of 17k and 40k BTC were registered from Binance to other wallets.
Binance, on the other hand, delivered these BTCs to a freshly formed wallet address that really belonged to the exchange. Effective outflows are anticipated to be in the 10,000 BTC range, which is far lower than the Binance outflow figures indicated on CryptoQuant.
Binance also revealed that certain statistics suggest significant withdrawals from the exchange. Because of the Bitcoin address changes, these outflows are essentially moves between the exchange’s hot and cold wallets.
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