Over the weekend, Bitcoin experienced a sudden spike in transaction fees and a surge of unconfirmed transactions, which sparked concern on Crypto Twitter over a potential Denial of Service (DoS) “attack” on the network. While some Bitcoin analysts and commentators have been quick to allay these fears from their respective followers, the surge in activity and block space demand has been attributed to the rise in Ordinals inscriptions.
Bitcoin average transaction fees are currently at $19.20 or 0.00068 BTC, according to BitInfoCharts. Meanwhile, according to Mempool Space, the backlog of transactions at the time of writing stood at 459,341. The increased demand on the network has even caused total fees per block to temporarily exceed the block subsidy reward of 6.25 BTC on May 7.
BITCOIN TRANSACTION FEES HAVE SURPASSED THE BLOCK SUBSIDY COINBASE REWARD
6.76 BTC vs 6.25 BTC
FIRST TIME SINCE 2017 pic.twitter.com/F0PKrlFYmQ
— trevor.btc @ NYC (@TO) May 7, 2023
The proof-of-work mining process has a set block subsidy of 6.25 BTC, which halves every four years. However, in the rare instance that block space demand surges, this figure can be exceeded, causing higher transaction fees. Industry analysts reported that this is the first time this has happened since 2017. Fees of 6.76 BTC were recorded for one block, and block 788695 generated fees of 6.7 BTC.
According to analytics provider Glassnode, a total of 75% of Bitcoin on-chain transactions used Taproot on May 7, resulting in a record high. The surge in activity and block space demand has been attributed to this rise in Ordinals inscriptions.
However, some on Crypto Twitter speculated that the recent congestion was the result of a DoS attack on the Bitcoin network. Bitcoin analysts quickly pointed out that it was due to demand rather than a premeditated attack. “0xfoobar” told his 130,000 followers:
“Bitcoin mempool finally gets some usage, and the maxis are framing it as a DoS attack on the network. They really have not considered even the most basic scenarios, like ‘Bitcoin becomes popular and people are willing to pay to use it’.”
The Bitcoin network is currently experiencing a surge in demand, with over 400,000 unconfirmed transactions in the mempool. This backlog has led to higher transaction fees as users compete for limited block space. While this congestion may cause frustration for some users, it’s important to remember that the market forces of supply and demand are at play.
JUST IN: There are now OVER 400,000 unconfirmed transactions in the #Bitcoin Mempool ???? ???? pic.twitter.com/ipjBEm3bv5
— Bitcoin News ???? Rooftop Meetup May 19th (@BitcoinNewsCom) May 7, 2023
It’s important to note that the Bitcoin blockchain is not vulnerable to DoS attacks because users can simply increase the fees attached to their transactions to ensure their transactions are prioritized by miners. In other words, the market forces of supply and demand regulate the fees needed to process transactions. When demand for block space exceeds supply, the fees required to incentivize miners to include a transaction in the next block increases. This dynamic ensures that the network remains secure and resilient to attacks, even during times of high congestion. While some users may experience delays or higher fees during periods of high demand, the network as a whole remains secure and functional.
On May 8, Binance, the world’s largest cryptocurrency exchange, suspended Bitcoin transactions again, citing “the large volume of pending transactions.” This is the second time in the past 12 hours that Binance has suspended BTC transactions.
Despite these recent concerns, Bitcoin continues to perform well, with its price remaining relatively stable in the face of market volatility. The cryptocurrency has also continued to attract institutional investors and major corporations, further solidifying its position as the leading cryptocurrency.
In conclusion, the recent spike in Bitcoin transaction fees and unconfirmed transactions has sparked concern about a potential DoS attack on the network. However, Bitcoin analysts and commentators have been quick to allay these fears and emphasize that it was due to demand rather than a premeditated attack. As Bitcoin continues to gain mainstream acceptance, it is likely to face further scrutiny and potential threats. Nonetheless, the strength of its community and security measures should enable it to weather these challenges.