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Cryptocurrency Fees Protect Users from Relentless Spam

What if it cost money to send an email, or make a post on Facebook or Twitter? Each of these actions can be thought of as a transaction. In the cryptocurrency world, every transaction costs money. For some who are used to the freemium model of the internet, this can be frustrating. Although, there are actually very good reasons that every cryptocurrency transaction has a fee attached to it. To put it simply, cryptocurrency fees are an anti-spam mechanism. If there is anything that Facebook, and Twitter can learn from crypto, it’s how to filter junk.

black screen with words you got spam

It’s Just a Little Fee

The fees that you see on cryptocurrency transactions are not substantial. Most of the time, you will be paying a fraction of a cent for a transaction on most cryptocurrency networks. It is only in times of significant traffic that transaction fees rise to unreasonable levels. The most intense period of transacting was in December of 2017. During this time a single bitcoin transaction would cost you $43.

Let’s put the outlier aside and discuss the typical scenario. The tiny fee attached to every transaction essentially has two purposes.

  1. Incentivize the miner/block producer/network to include your transaction in the next block
  2. Stop malicious / spammy transactions from taking place

Without the fee, you’re essentially using the network for free. Cryptocurrency networks don’t have the ability to advertise like Facebook, and therefore it can’t offer you a free transacting service. However, cryptocurrency networks can offer you the fastest, cheapest, most reliable money transfer service the world has ever known. So it seems like a small fee is a pretty fair trade for using the network.

The second purpose of fees is to prevent spam transactions. The purpose of a spam transaction would be to clog the network, and make it unusable for everyone else. Large networks such as Ethereum and Bitcoin have experienced periods of congestion before, and it is quite unpleasant. They have never experienced clogging due to an outright attack on the network though. Let’s dive into why. 

Make it Expensive to Attack the Network

The whole ideology behind fees as a anti-spam mechanism is to make it expensive to attack the network. Bitcoin is quite slow at processing transactions (3-5 tx/s). Despite this fact, an attacker would still need to broadcast many transactions to clog the network. Even then, bitcoin would chug through the spam transactions, include them in blocks, and eventually return to normal. Because bitcoin would get through a one-off attack relatively easily, an attacker would need to continuously broadcast transactions, and never stop.

A one-off attack on the bitcoin network would be quite expensive. On the low end of things, bitcoin can fit about 500 transactions inside a single block. A block is published once every 10 minutes. If we assume a transaction fee of $1, that’s $3000 per hour to render the network unusable. This comes out to $72,000 per day to ruin the network for everyone else. That’s actually not too bad, the number is even low enough for an interested government to consider.

Luckily, the whole situation is a bit more nuanced that it was just laid out to be above. In order to send a bitcoin transaction, you need to have a minimum of 500 satoshis per bitcoin. If we factor this into the above cost, it’s an additional $25 worth of bitcoin per block. The attacker would need to procure this bitcoin from somewhere, and the likely location would be a cryptocurrency exchange. Eventually what this means is the attacker would eventually drive up the price of bitcoin by trying to attack the network. This in turn would cause the attack itself to cost ever increasingly large amounts of money. The last factor is that anyone can place a higher transaction fee on their transaction and get it included before the attackers transactions.

Escalating Transaction Fees

So we have an attacker spamming transactions to the bitcoin network at $1.00 per transaction. All I need to do to get my transaction included in the next block is attach a fee of $1.01. Now if the attacker wants to continue spamming the network, they would need to pay $1.02 for each of their transactions. This will cause a runaway effect, where eventually, the transaction fees become too high for the attacker to manage. Eventually it becomes too expensive to attack the network. This in a nutshell is the genius of requiring transaction fees to be paid in order to send transactions.

Freemium No More

The implications that this model could have on fake news and social media is broad. What if Facebook made it cost money to post on their platform? I personally wouldn’t mind not seeing political rants, and what my neighbour had for supper. More than that, I would love to see a reduction in fake news and misinformation on my news feed. Making it cost money to post at the very least would cause people to consider if what they’re posting is actually worth the cost. But there needs to be some way for users to earn money, some sort of kickback for popular posts. is a social media platform that has done just this. They’ve limited the number of times you can post, as well as made it cost a small amount of money to do so. Furthermore, the money that it costs to post, will in turn be distributed to people with the most popular content. This completely gets rid of the need for the platform to advertise to its users. The fees collected from posting are enough to sustain the platform and its users financially. This might result in a neater, tidier experience. However, I don’t see Facebook giving up their billions in ad revenue anytime soon.

Let’s Be Done With Spam

My hope is that industry can learn a thing or two from cryptocurrency networks. You can think what you like about cryptocurrency, but they’ve definitely innovated on how to achieve a net reduction in spam. I for one would love to see less spam in my social media news feeds. We might even see a reduction in harmful comments if it costs these people money to be hateful.  It’s easy to spot a good solution to a problem because it is simple, and scales elegantly. Cryptocurrency fees are exactly that, a simple, elegant solution to one of the biggest problems on the internet; SPAM.

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About the Author

Keegan Francis

Keegan Francis is a cryptocurrency knowledge expert and consultant. He recognized the opportunity in cryptocurrency early in his career and has been invested in it since 2014. His passion led him to start the Atlantic Blockchain Company which consults on blockchain technology and cryptocurrency know-how.