Bitcoin withdrawals were temporarily suspended by Binance on 7th May 2023; this situation lasted for less than an hour, but it caused quite a stir in the crypto world. Binance blames network congestion.

What is network congestion?

     Binance has claimed that bitcoin withdrawals had to be suspended due to network congestion. Network congestion refers to the situation when data transfer exceeds the capacity of a network node; this reduces the quality of the network, and data can also get stuck like a traffic jam. Binance did this when 117359 bitcoins were withdrawn from there recently.

Solution to network congestion

     Transferring large amounts of bitcoin can cause such a problem again,  bitcoin transactions are traditionally done at low-traffic times to avoid network congestion. Nowadays, off-chain solutions such as the Lightning Network are being used to make transactions happen just in time with  almost no fees. Similarly L2 is also considered a good solution for centralised exchange.

Is Binance Ready?

There has been no message or update from CZ about the network congestion problem. This means that CZ is not inclined to use the current solutions. Various exchanges have started using the Lightning Network, or L2, but Binance has yet to adopt it. Binance still needs to find a solution for transaction fees and times.