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 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.
https://www.btcsecuritybudget.com/
This might be something you'd like to play around with.
It's a cool website. I don't understand why it calls it secure though:
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 chartbtw a related thing:
Here is the yearly-average price appreciation of the last 4 halvings, courtesy of ChatGPT and research:
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.
https://postimg.cc/5YGCX4hJ
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:
So far, I haven't seen any convincing counter argument. Care to provide any?
just imagine you in 2140 being stardust... do you really care about blockspace when you are stardust?
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.
use LN. Have you heard about that?
Performance improvements in mining are helping offset that.
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
The security budget is not a theoretical curiosity it is a hard economic reality tied directly to block rewards and transaction fees. As rewards shrink miners will only sustain operations if fees grow enough to compensate which means network activity must scale without undermining usability. The point of concern comes when the cost to attack drops faster than the economic incentive to secure.