5 years ago, I was arguing with a friend (who was an ETH maxi) about Bitcoin's inevitable security budget issue. Back then, I said it's a theoretical issue which is too early to be concerned about - Bitcoin had a lot of harder, more-pressing issues to climb.
Fast forward, we're 5 years in. Bitcoin has climbed over a lot of issues and is seemingly beginning to get all the institutional adoption we've been waiting for. It feels like now's the time to reason about long-term sustainability (I hate that word) of the network's security.
I'm not looking for solutions in this thread. I'm asking for analysis. Does anybody know of resources that have analyzed things like:
- how much hashrate (or $ spend per day) is reasonably needed to secure the network at market cap
$X
? - given some reasonable valuation expectations (i.e certain % price growth every year), how much will the block reward halvening reduce the daily $ revenue (not profitability) of miners? At what year may the security budget reasonably peak and become a concern?
These are existential questions for Bitcoin, because they denote the sustainability of Proof of Work. Anything else is massively risky for the network, both in terms of migration cost, social consensus cost and, of course, centralization and control of the network.
0.25%, 1%
of what, market cap? That doesn't seem to be the case in the chart