A sudden spike in Bitcoin (BTC) transaction fees and unconfirmed transactions sparked concern on Crypto Twitter over the weekend of a potential Denial of Service (DoS) “attack” on the network.
Some Bitcoin analysts and commentators have been quick to allay these fears from their respective followers.
Bitcoin average transaction fees are currently $19.20, or 0.00068 BTC, according to BitInfoCharts. Meanwhile, according to Mempool Space, the backlog of transactions at 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 it 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.
The Mempool Space explorer shows that activity has since cooled down a little and fees have fallen back below the block reward again. The next block is expected to be processed generating 4.51 BTC in fees.
The surge in activity and block space demand has been attributed to the rise in Ordinals inscriptions. According to analytics provider Glassnode, a total of 75% of Bitcoin on-chain transactions used Taproot on May 7, resulting in a record high.
Some on Crypto Twitter, however, speculated that the recent congestion has resulted from a DoS (denial of service) 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’”
On May 8, the world’s largest crypto exchange, Binance, suspended Bitcoin transactions again, citing “the large volume of pending transactions.” It is the second time that Binance has suspended BTC transactions in the past 12 hours.