Over the weekend, some people believed that the Bitcoin network was under a Denial of Service (DoS) attack. What was the reason for the spike in transaction fees and huge mempool backlogs? In this article, we’ll look into the recent increase in transaction fees and the surge in demand for block space on the Bitcoin network.
Mempool Backlogs and Transaction Costs
Transaction fees were higher than usual over the weekend, and a large number of transactions were suspended. According to BitInfoCharts, the average Bitcoin transaction fee on May 9, 2023, was $19.20. Additionally, there were backlogs of 444,341 unconfirmed transactions. However, as of writing, the transaction fees have decreased to around $6, and the number of unconfirmed transactions has decreased to around 406,000.
High Transaction Fees Surpass Bitcoin Rewards
On May 8, 2023, the increased demand on the Bitcoin network led to the total cost per block temporarily surpassing the block reward of 6.25 BTC. Miners who are the first to solve the “puzzle” and add a block full of transactions to the blockchain receive a bonus of 6.25 Bitcoin, which is halved every four years. In rare cases, the transaction fees are higher than the bonus, which happened over the weekend. A Twitter user reported transaction fees of 6.76 BTC.
NFTs and Memes as an Attack on Bitcoin?
The surge in activity and demand for block space on the Bitcoin network has been attributed to the rise of Bitcoin inscriptions, a new product on Bitcoin that uses the Ordinals technology to create non-fungible tokens (NFTs) and inscribe them into satoshi, the smallest unit of Bitcoin. With the new BRC-20 standard, meme coins can also be created on Bitcoin.
Taproot’s Increasing Adoption
According to Glassnode, on May 7, 2023, as much as 75% of Bitcoin transactions used Taproot, a new software upgrade that improves privacy and security, among other things. Taproot was activated on the Bitcoin network on November 15, 2022, after years of development and testing.
Bitcoin Targeted in Intentional Attack?
Some Twitter users speculated that this weekend’s congestion was caused by a DoS attack on the Bitcoin network. With a DoS attack, thousands of transactions would be made to slow down Bitcoin and intentionally make it more expensive. However, many well-known analysts quickly denied the rumors. For example, 0xfoobar tweeted, “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.'”
Although some people believed that the Bitcoin network was under a DoS attack, many analysts denied the rumors. The surge in demand for block space on the Bitcoin network can be attributed to the rise of Bitcoin inscriptions and the use of Taproot. The increased activity has led to higher transaction fees and backlogs of unconfirmed transactions. However, as of writing, the transaction fees have decreased, and the number of unconfirmed transactions has decreased. It is important to note that although the increase in transaction fees is an inconvenience, it is not a security issue or a threat to the Bitcoin network.