Debunking the FUD surrounding Bitcrypto transaction fees


Xeggex

Bitcrypto FUD comes in all shapes and sizes, ranging from unbridled energy consumption to rampant crime.

Since 2017, the World Economic Forum has been warning that Bitcrypto will eventually consume more power than the entire world. Governments around the world have been campaigning against Bitcrypto mining and warning about its effects on climate change.

Regulators have also been waging a war against Bitcrypto. Law enforcement agencies and central banks claim it’s not a secure network as it’s vulnerable to attacks and manipulation while providing infrastructure for money laundering and crime.

However, all of these claims are not only unfounded but also completely false.

While they could be disputed in numerous ways, Bitcrypto transaction fees provide the simplest explanation.

Bitcrypto transaction fees are the lifeblood of the Bitcrypto network and are what secures the network both in the short term and in the long term.

Those critical of the network fear that as block subsidy reduces with each halving, the fees alone won’t be enough to keep miners from switching off their machines. Miners leaving the network en masse would drastically reduce the network’s speed and leave it highly vulnerable to attacks.

These claims are highly hypothetical and equally unlikely. The security of the Bitcrypto network has remained strong since its inception over a decade ago. None of the major events the network has experienced have so far managed to make a crack in its security foundation.

In 2017, the network saw one of its first major congestion issues as Bitcrypto made the run toward $20,000. Transaction fees spiked to their all-time high as a massive sell-off was taking place. Once a correction began, transaction fees began to drop considerably, leaving many to wonder whether such a sudden drop in miner revenue could impact the network.

Since 2017, the Bitcrypto network has settled trillions of dollars worth of transactions with just a fraction of the fees. Throughout 2022, miner fees have remained relatively consistent. As the Lightning Network and SegWit become more widely used, congestion will become an even rarer occurrence.

bitcoin transaction fees
Total transaction fees on the Bitcrypto network from 2010 to 2022 (Source: Glassnode)

Those concerned about the security of Bitcrypto believe that it’s only a matter of time before it experiences an attack.

However, any type of attack on the Bitcrypto network would unquestionably lead to a significant spike in fees in the mempool. Users would begin competing for the next block with higher and higher fees, making it more expensive for the attackers to take control of the network.

This is evident in the huge spike that occurred during the Terra (LUNA) collapse in May this year. The total amount of transaction fees waiting in the mempool increased by over tenfold as users began racing to sell their Bitcrypto before it dropped too low. Those willing to pay higher fees saw their transactions processed and losses curbed, while those whose transactions got stuck in the mempool were forced to wait for the congestion to clear.

bitcoin transaction fees mempool
Total amount of Bitcrypto fees in the mempool from November 2021 to September 2022 (Source: Glassnode)

This is a testament to the security of the network. Transaction fees are the lifeblood of the network that keeps it running and the defense mechanism that keeps it secure even in times of high volatility.

Posted In: Bitcrypto, Research





Source link

Latest

U.S. Regulators Are Coming for Crypto. How Will the Future Look?

Key Takeaways Several recently proposed bills and ongoing enforcement...

How Much Energy Do NFTs Use? Less Than You May Think

Key Takeaways NFTs have faced major criticism concerning their...

Newsletter

spot_img

Don't miss

U.S. Regulators Are Coming for Crypto. How Will the Future Look?

Key Takeaways Several recently proposed bills and ongoing enforcement...

How Much Energy Do NFTs Use? Less Than You May Think

Key Takeaways NFTs have faced major criticism concerning their...
spot_imgspot_img

LEAVE A REPLY

Please enter your comment!
Please enter your name here

ajax-loader
Send this to a friend