A mempool, derived from the combination of memory and pool, is a cryptocurrency node’s mechanism for storing information on unconfirmed transactions.
Understanding the term
In a blockchain network, transactions are sent from a node to its peers who will then further pass it on to their peers. This continues till the transaction has reached all the peers, and is ready for miners to add it to a block. A mempool acts as a waiting room for transactions that have yet to be added to a block. Each node shares mempool data by relaying signed transactions to each other.
Each mempool is configured differently to receive transactions at different times. Lower-end devices may only dedicate small amounts of memory to logging transactions while higher-end devices may allocate more. A high mempool size is an indication of more network traffic, which may result in longer confirmation times and higher fees. This makes mempool size a good metric to estimate network congestion.
A mempool acts as a node’s holding area for pending transactions. The number of nodes and mempools are equal as not all nodes receive the same transactions at the same time. This results in some nodes storing more information than others at any given time.