Bitcoin FUD comes in all shapes and sizes, from rampant energy consumption to rampant crime.
Since 2017, the World Economic Forum has been warning that Bitcoin will eventually consume more energy than the entire world. Governments around the world have campaigned against Bitcoin mining and warned about its effects on climate change.
Regulators have also waged a war against Bitcoin. Law enforcement and central banks say it is not a secure network as it is vulnerable to attack 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 can be challenged in numerous ways, Bitcoin transaction fees provide the simplest explanation.
Bitcoin transaction fees are the lifeblood of the Bitcoin network and are what protects the network in both the short and long term.
Critics of the network fear that since the blocking subsidy is reduced with each halving, the tariffs alone will not be enough to keep miners from shutting down their machines. Miners leaving the network en masse would drastically reduce the speed of the network and leave it highly vulnerable to attack.
These claims are highly hypothetical and equally unlikely. The security of the Bitcoin network has remained strong since its inception over a decade ago. None of the major events the network has experienced so far has managed to crack its security foundations.
In 2017, the network saw one of its first major congestion problems when Bitcoin raced towards $ 20,000. Transaction fees increased to their all-time high as a massive sale was occurring. Once a correction began, transaction fees began to drop considerably, leaving many wondering if such a sudden drop in miners’ revenue could impact the network.
Since 2017, the Bitcoin network has paid out trillions of dollars in transactions with only a fraction of the fees. Throughout 2022, miners’ rates remained relatively constant. As Lightning Network and SegWit become more widely used, congestion will become an even rarer occurrence.
Those who are concerned about Bitcoin’s security believe it is only a matter of time before it comes under attack.
However, any kind of attack on the Bitcoin network would undoubtedly lead to a significant increase in the fees in the mempool. Users would start competing for the next block for ever higher fees, making it more expensive for attackers to take control of the network.
This is evident in the huge peak that occurred during the collapse of the Earth (LUNA) in May of this year. The total amount of pending transaction fees in the mempool increased more than tenfold as users ran to sell their Bitcoins before they dropped too much. Those willing to pay higher fees have seen their transactions processed and losses reduced, while those whose transactions got stuck in the mempool were forced to wait for congestion to clear up.
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.