At the time of writing this piece, May 2023, there seems to be coordinated effort to destabilize Bitcoin. There is a flood of Bitcoin transactions underway, clogging up the exchanges and driving the fees exponentially higher than their usual levels. For the regular user, that means that if you initiate a transaction you can either choose to pay a low fee and wait or pay a much higher fee and get it processed sooner. Many news outlets and analysts are spreading misinformation on the negative effects the current events will have on Bitcoin, but we are here to make the case that this coordinated attack is in fact going to have the exact opposite effect and strengthen Bitcoin.
Bitcoin (BTC) supports a limited number of transactions per second (around 7-9 TPS). This means that to artificially create congestion of the whole system you'd need to send 7 * 60 * 60 * 24=604k transactions per day. The usual transaction fee has been around $1.00. It is easy to calculate that in order to create such a monumental backlog in the system, one would have to use $604,800.00 per day. HOWEVER, the clog will ONLY occur if users are not willing to spend more per transaction, $2.00 for instance. At present the fee per transaction is $30.00, meaning one would have to spend $30.00 * 604800 = $18 million to prolong the attack at the current rate. But if someone is set on completing their transaction, they may be willing to pay the inflated fees, forcing the perpetrators into a very expensive game of cat and mouse.
If you want to buy a cup of coffee and a venue that supports Bitcoin payments or use Bitcoin for various other smaller transactions, what should you do? Use the Bitcoin Lightning network instead. It enables you to send transactions for mere cents. It is wise to generally avoid normal Bitcoin transactions for lesser amounts, in the first place. To put it in perspective, if you send $1000.00 worth of Bitcoin, then suddenly paying $30.00 doesn’t seem like much at all. Especially compared to the transaction fees of traditional financial systems.
You may wonder, how this benefits Bitcoin. This type of deliberate attack can only be perpetrated by those who stand to lose from the rise of Bitcoin’s value. Namely, governments that are experiencing the devaluation of their currencies, dept, and destabilization of their financial systems. In a desperate attempt to hang on to power, governments around the world would need to have resorted to printing immeasurable amounts of money in order to carry out the attack, further damaging the fragile financial ecosystem.
What happens:
The results:
As Nassim Taleb put it beautifully in his book “Antifragile”: “Some things benefit from shocks; they thrive and grow when exposed to volatility, randomness, disorder, and stressors”. Antifragility implies more than mere resilience, but rather an opportunity for sustained growth and favorable outcome. For those who have taken a keen interest in Bitcoin over the years, I think I speak for all of us when I say it has proven its antifragility beyond a doubt.