New attack identified and potential solution described: Dropped-transaction spam attack against the block size limit

Summary:

The block size limit was implemented in Bitcoin to prevent massive blocks from being used as an attack, which would enrich the miner by delaying other miners while they download and validate the large block. However, the block size limit opened up a different attack: spamming the network. Prior to the limit, spamming would have been economically unfeasible because every transaction would have a fee. Now, a spam attack can be used to force transaction fees higher by dropping transactions from mempools. This undermines Bitcoin's credibility and usability. The proposed solution is to add a new rule on how fees are handled, where some amount of every fee should be burned and cannot be spent. If we'd like miners to continue to collect the same fees after this change, we can suggest doubling the default fee per transaction. Half of every fee would be burned, and the other half collected by the miner of the block as is done today. This solution would mean large blocks would cost a significant number of bitcoin to create, even when all transactions are created by the miner of that block. The block size limit can be removed once a minimum fee is paid for most transactions in every block, and the new transaction fee rule is in place.

Updated on: 2023-06-09T22:38:07.997101+00:00