Bitcoin has been the subject of much concern and speculation in recent days as transaction fees continue to skyrocket and the mempool backlog grows ever larger. All these ultimately peaked and led to major congestion in its network by Sunday. While some believe this is simply a natural consequence of the cryptocurrency’s growing popularity and increasing adoption, others see it as evidence of an orchestrated attack on the network.
The Mempool Congestion
According to Decrypt, citing mempool.space data a couple of hours ago, there were currently over 469,000 transactions waiting to be confirmed in Bitcoin’s mempool. As of this writing (Monday at around 4:45 AM Central European Time), it’s now over 486,000.
Transactions must be added to the network’s mempool before they can be inserted into Bitcoin’s blockchain. However, with such a large backlog, many transactions are being delayed, and some users are reporting that fees are becoming prohibitively expensive.
High Fees and Attack Concerns
Bitcoin’s high transaction fees have raised alarms among some users. The cost of high-priority transactions was at 654 sat/vB when the source detected the anomaly, which was equivalent to around $26 per mempool.space data. Right now, the high-priority figures eased up a bit at 503 set/vB with the fees still near the $20 mark.
There are concerns that this spike in fees is an indication of a coordinated attack on Bitcoin, with some speculating that it is a deliberate attempt to render the network impractical for smaller players. As a result of this series of events, Binance had to halt withdrawals related to Bitcoin a couple of times.
The Fight for Bitcoin
Some analysts believe that increasing the costs in the short term may not have a significant impact on Bitcoin in the long run. They view these alleged attacks as a part of the ongoing battle for dominance in the cryptocurrency market, believing that Bitcoin will eventually emerge more robust and resilient as a result.
Protocol and Inscriptions
A potential reason behind the surge in transaction fees and network congestion could be the use of the Ordinals protocol for creating NFT-like assets on Bitcoin. Based on Dune Dashboard, the total number of these Bitcoin-based digital assets known as inscriptions has reached over 4.3 million.
The rise in inscriptions can be linked to the increasing demand for BRC-20 tokens, which were first introduced as an experiment in March. Several exchanges, including UniSat Wallet, have enabled the trading of these tokens built on Bitcoin, which resemble the ERC-20 tokens on Ethereum.
Is Bitcoin Being Under Attack?
While some on Twitter are concerned that Bitcoin is being attacked, others are more optimistic and are quick to dismiss the conspiracy theories that are unfolding. They believe that the current situation is simply a result of the cryptocurrency’s growing popularity and adoption, and that the network will ultimately emerge stronger as a result.
According to Bitinning founder Kashif Raza, developers are using the Ordinals protocol to explore new possibilities that cannot be stopped. He sees this as evidence of a free market in action, where innovations like these are simply a natural part of the ongoing evolution of the cryptocurrency space.
In a nutshell, the recent congestion in the Bitcoin mempool and the high transaction fees have sparked concerns about an attack on the network. While some believe that this is simply a natural consequence of the cryptocurrency’s growing popularity and adoption, others see it as evidence of an orchestrated attack on the crypto itself. However, there are also those who remain optimistic, seeing these developments as evidence of a healthy, competitive market.
Regardless of the cause, the situation highlights the need for ongoing innovation and development within the cryptocurrency space in order to ensure that Bitcoin and other cryptocurrencies can continue to grow and thrive.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.