A sudden increase in transaction fees and unconfirmed transactions in Bitcoin (BTC) drew attention. This congested processing process sparked concerns on Twitter over the weekend of a potential Denial of Service (DoS) “attack” to the network. So, has BTC really been hit by a DoS attack?
Is the claim of DoS attack for Bitcoin true?
Some Bitcoin analysts and commentators were quick to allay fears about the DoS attack. According to BitInfoCharts, Bitcoin average transaction fees are currently $19.20, or 0.00068 BTC. Meanwhile, according to Mempool Space, the backlog at the time of writing is 459,341. The increased demand on the network even caused the total fees per block to exceed the 6.25 BTC block reward on May 7. The proof-of-work (PoW) mining process has a 6.25 BTC block reward that halves every four years. However, this figure can be exceeded, resulting in higher transaction fees, as can be seen in the rare cases where the demand for block space increases.
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
Industry analysts report this is the first time this has happened since 2017. A fee of 6.76 BTC was recorded for a block, and block 788695 generated a fee of 6.7 BTC. Mempool Space explorer notes that activity has cooled a bit since then. It shows the fees again falling below the block reward. The next block is expected to be processed generating 4.51 BTC fees. The increase in activity and block space demand was attributed to the rise in Ordinals transactions. According to analytics provider Glassnode, on May 7, a total of 75 percent of on-chain Bitcoin transactions used Taproot. This has reached a record level.
The problem is with the demand
As a result, on May 8, the largest crypto exchange Binance cited “large volume of pending transactions.” cryptocoin.com As we reported, Binance has suspended BTC transactions for the second time in the last 12 hours. However, some in the cryptocurrency community on Twitter have claimed that the recent bottleneck was caused by a DoS (denial of service) attack on the Bitcoin network. Bitcoin analysts pointed out that this was due to demand rather than a premeditated attack. “0xfoobar” told his 130,000 followers:
The Bitcoin mempool is finally getting some use, and BTC maximalists are framing it as a DoS attack on the network. They really don’t even consider the most basic scenarios like ‘Bitcoin becomes popular and people are willing to pay to use it’.
a good reminder that it's still cheaper to transfer ETH on Ethereum ($6.08) than it is to transfer BTC on Bitcoin ($8.05) pic.twitter.com/SgaoAeru0F
— foobar (@0xfoobar) May 7, 2023
Binance tweeted earlier on Monday that “the fees set do not anticipate the recent increase in Bitcoin network gas fees.” It is also worth noting that the exchange has announced its plan to activate Bitcoin Lightning to speed up transactions. Currently, the crisis in Binance seems to have caused selling pressure on the BTC price. BTC is changing hands at around $28,200, down 2% at the time of writing.
