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Has anyone seriously analyzed the Security Budget concern?
1743 sats \ 11 comments \ @2minutebitcoin 4 Oct bitcoin
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.
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50 sats \ 1 reply \ @OT 4 Oct
https://www.btcsecuritybudget.com/
This might be something you'd like to play around with.
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21 sats \ 0 replies \ @2minutebitcoin OP 4 Oct
It's a cool website. I don't understand why it calls it secure though:
"The three memes are in a "good" state if the fee is less than 100 USD, the block size is less than 10 MB, and the relative miner revenue is greater than 1%. You can change these thresholds in the Settings menu.
Then the settings show the security threshold is 0.25%. In any case - 0.25%, 1% of what, market cap? That doesn't seem to be the case in the chart
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21 sats \ 0 replies \ @2minutebitcoin OP 4 Oct
btw a related thing:
Every 4 years, Bitcoin needs to 2x in value to keep the security budget the same (all else equal); Otherwise it drops.
Here is the yearly-average price appreciation of the last 4 halvings, courtesy of ChatGPT and research:
🪙 Cycle⏱️ Years📊 Start Avg Price📊 End Avg Price💥 Multiple (×)
1️⃣ 2012 → 20161st → 2nd halving$8$600≈ 75×
2️⃣ 2016 → 20202nd → 3rd halving$600$11,000≈ 18.3×
3️⃣ 2020 → 20243rd → 4th halving$11,000$70,000≈ 6.36×
4️⃣ 2024 → 2025 (ongoing)4th → current$60,637$114,056 (latest)≈ 1.8× (so far) (3 years left to go)
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22 sats \ 5 replies \ @DarthCoin 4 Oct
All your answers are on https://endthefud.org and my personal answer: your expectations are only fiat expectations.
So change your fiat mindset or you will get rekt.
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205 sats \ 4 replies \ @2minutebitcoin OP 4 Oct
https://endthefud.org
Good website, what part addresses the security budget? I only found one link "“Block rewards will stop in the future and Bitcoin will lose all security” (safehodl)" and it doesn't work - https://safehodl.github.io/failure/#block-rewards-will-stop
Finding it via the web archive (https://web.archive.org/web/20240808135354/https://safehodl.github.io/failure/#block-rewards-will-stop) shows this:
Block rewards will stop in the future and Bitcoin will lose all security Bitcoin transaction fees have been steadily increasing with Bitcoin’s price. Block space is fixed supply. As more people demand to own Bitcoin on the base layer, but the block size stays constant the transaction fees will rise. Block rewards drop every 4 years until 2140 giving the network plenty of time to adapt to observed changes.
  1. There is time, I'm not saying it's a problem tomorrow. But it's not plenty of time either. The moment the budget starts declining it needs to begin being addressed. It's not like a solution (especially one that changes consensus) will be merged in 2 years...
  2. Fees have not been increasing in sat terms. In fact, a recent Core change lowered the minimum sat per vbyte. In USD terms they have increased (because BTC appreciated), but not materially.
  3. Sure, in theory fees should rise. In practice, this hasn't happened (for whatever reason). It's idiotic to keep faith that it'll somehow solve itself through fees when reality is showing you the hard opposite
So far, I haven't seen any convincing counter argument. Care to provide any?
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10 sats \ 0 replies \ @DarthCoin 4 Oct
just imagine you in 2140 being stardust... do you really care about blockspace when you are stardust?
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0 sats \ 1 reply \ @TheCharlatan 4 Oct
Reposting my answer to the same question earlier this week:
Maybe we'll have to change our expectations for acceptable number of confirmations, maybe nothing changes. I think things will not change significantly for users. Fees now already reflect how long you are willing to wait to reach an acceptable level of finality. If we want faster finality we will pay more to miners, if not we'll pay less.
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0 sats \ 0 replies \ @DarthCoin 4 Oct
use LN. Have you heard about that?
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0 sats \ 0 replies \ @ivermectin 4 Oct outlawed
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.
10 sats \ 0 replies \ @BITC0IN 4 Oct
it's a bullshit narrative spun by people with dubious motivations
full read through of this issues source here https://odysee.com/@BITCOIN:98c/15-drinks-with-bitcoin-discord-peter:3
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0 sats \ 0 replies \ @035736735e 4 Oct outlawed
stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.