Blockchain congestion and transaction queues actually prevent ‘pregnant actors’: study

Researchers from Florida Atlantic University and the University of Mississippi recently published research showing that blockchains with “full” blocks – especially when there is a transaction queue – have additional protection against malicious actors, counterfeiters and fraudsters.

The team's paper, titled “Bitcoin Blocksize, Costodial Security and Price,” was published in Mt. Gox crash and other instances where cryptocurrency was stolen from crypto exchanges.

The study is based on the assumption that the perpetrators of illegal activities want to complete counterfeiting transactions as quickly as possible.

According to the paper:

“This investigation is driven by the following mindset: As the block size approaches the limit, the next transaction may be printed on a later block, not very current. When these cybercriminals breach a crypto exchange or fraudulently ‘shut down' it, they want to launder the stolen bitcoins quickly.”

The researchers tested their hypothesis using historical Bitcoin blockchain data and the crypto exchange's “fraud report”. Using the sample period from 2010 to 2021, they created a “fullness” point for the blocks against which to evaluate the data.

After creating the benchmark, the team analyzed historical data for two specific metrics: how much block fullness contributed to the value of Bitcoin (BTC) and how much block fullness acted as a deterrent to bad actors.

Their assessment, according to the paper, confirmed the team's hypothesis that “full bitcoin blocks act as a deterrent to hackers and fraudsters because they signal congestion.” Also, realizing their secondary hypothesis that full blocks “indicate an increase in the security of the network, which is also valued,” Block Full has affected the price of Bitcoin.

According to the team's findings, block saturation is 20% lower on an “average day” of cryptocurrency breaches or fraud.