Blockchain Inefficiency in the Bitcoin Peers Network

Abstract

We investigate Bitcoin network monitoring the dynamics of blocks and transactions. We unveil that 43\% of the transactions are still not included in the Blockchain after 1h from the first time they were seen in the network and 20\% of the transactions are still not included in the Blockchain after 30 days, revealing therefore great inefficiency in the Bitcoin system. However, we observe that most of these `forgotten' transactions have low values and in terms of transferred value the system is less inefficient with 93\% of the transactions value being included into the Blockchain within 3h. The fact that a sizeable fraction of transactions is not processed timely casts serious doubts on the usability of the Bitcoin Blockchain for reliable time-stamping purposes and calls for a debate about the right systems of incentives which a peer-to-peer unintermediated system should introduce to promote efficient transaction recording.