Can Bitcoin survive on fees alone after block subsidy dies?

[Comeacross]

We talk about bitcoin 21m cap everyday but I think we talk less about what happen after year 2140. The block subsidy is scheduled to reach zero around the year 2140. After this, there will be no more new coins and miners will survive only on transaction fees. This was part of Satoshi original design but I'm curious whether this is sustainable in practice. Will that be enough to secure the network?

Once the last Satoshi is mined, bitcoin security will depend entirely on users competing for block space and paying fees high enough to support a strong global hashrate. Will demand for on chain settlement generate enough fees to keep mining profitable and 51% attacks economically unfeasible? Did Satoshi plan for for this or he assume bitcoin would be so valuable in the future? Or maybe he made mistake?

History shows bitcoin has adapted through every halving so far but I'm genuinely curious as we approach the end of the subsidy era. I know 2140 is still  very far but the incentive we build today determine if Bitcoin is still secure for next generations.

[Zaguru12]

This particular question has been discussed numerous times here, I will actually advise that you use more of the search button  for questions like this.

Nonetheless, this is actually a worry that I think all of us here wouldn’t be alive to see the last bitcoin mined and just like quantum computing scares let’s leave the worries till then.

We talk about bitcoin 21m cap everyday but I think we talk less about what happen after year 2140. The block subsidy is scheduled to reach zero around the year 2140. After this, there will be no more new coins and miners will survive only on transaction fees. This was part of Satoshi original design but I'm curious whether this is sustainable in practice. Will that be enough to secure the network?

I think in the next 20 years to come we will be even getting it clearer as maybe transaction fee will actually be sufficient for miners because by the 10th halving around 2048 the block reward would have reduce to 0.0488 bitcoin per block which is quite lower than even what miners earn now from bitcoin fees and further years more miners will be depending on fees far away from the exact year that the mining will be completed so it will be clear what happens next before 2140.

The idea is that the increasing price of bitcoin will help cushion for this plus then bitcoin would have had more adopters which means more transactions. Even if the block size remains same and then the people prioritize the layer 2s like lightening network, then opening/closing of channels will be on the base network plus it means larger transactions will be on the network too.

So by then technically we should be seeing more bitcoin been accumulated as fees and with the increase in the price then it could just be enough.

[Mia Chloe]

~snip

Mining itself is already becoming an unprofitable stuff to be honest. Basically from your question the most I can say is we'll probably get to know when we get there. However if I actually had to speculate I'd say what could happen would probably be a decline in numbers of active miners.

Transactions fees will still hold up but honestly this problem is still over a decade away and the closer you think we are getting to his point the farther it actually is.

[Cookdata]

Nonetheless, this is actually a worry that I think all of us here wouldn’t be alive to see the last bitcoin mined and just like quantum computing scares let’s leave the worries till then.

You know what's sad about this? If you deduct 2026 from 2140, that's 114 years from now, no human on this forum active today might be alive by then. Sad stuff.  

[Zaguru12]

You know what's sad about this? If you deduct 2026 from 2140, that's 114 years from now, no human on this forum might be alive by then. Sad stuff. 

Exactly the reason why I would say why worry for that, would someone had envisioned bitcoin in the last 114 years? I don’t think so, so we don’t even know what will happen before then but humans are too curious. Although the whole situation of whether the fees will be sufficient will be pertinent in the next 25 years from now.

[PrivacyG]

Bitcoin has only been around for about 17 years.  And look how much it changed.  How many Forks we had.  It adapted to the current times and if it can not survive on Fees alone, some thing will have to change.

Satoshi has obviously thought about what will happen in 2140.  I would personally say it is going to survive on Fees alone but that depends on many factors.  Including whether in the following 114 years there is going to be a Bitcoin competitor that ultimately proves to be superior and takes over.  I would say living the moment and not caring about the future is not the best way to approach this question either but it is not the end of the World.  If the survival had such a small chance, none of us would be here because why support some thing that has an expiration date.

[odolvlobo]

... there will be no more new coins and miners will survive only on transaction fees. This was part of Satoshi original design but I'm curious whether this is sustainable in practice. Will that be enough to secure the network?

Bitcoin mining is designed to be profitable for miners as long as there are transactions paying fees. This is because unprofitable miners stop mining and that makes it more profitable for the miners that remain.

The real question is whether fees will be enough to keep Bitcoin safe from a 51% attack, and nobody has answered that question (AFAIK). We will have a better idea in a decade or so when the subsidy drops to a point where it is exceeded by the fees.

[Repeat06]

Bitcoin has been in the market for a little over 17 years now and the time you mentioned is about 114 years or less. If we look at the demand for Bitcoin and the price of Bitcoin, then maybe we can understand this completely.

The same amount of fees that we are currently paying may become much larger in the future. But yes, if the demand for Bitcoin increases in the future, then maybe we will not see the crisis of miners and there will be no fear of this 51 attack.

There is still a lot of time and during this time, technology will improve further and at the same time we can expect to see technical improvements in Bitcoin. As we have seen against quantum computers.

I hope this comment by Satoshi Sir is helpful for you : https://bitcointalk.org/index.php?topic=48.msg316#msg316

[tromp]

The year 2140 is quite irrelevant in this discussion. Even with minimal fees, a well filled block brings in about 0.02 BTC in fees.

The year when block subsidy falls below that is 2056, a full 84 years before the last satoshi is mined,
and only 30 years from now. Most of us will live to see that. By 2076, block subsidy will be an insignificant fraction of tx fees.

The chain will have rather poor security by then if people are still paying minimal fees.
And a much higher price doesn't change the fact that the cost of an attack will be rather small compared to the value of an attack which also scales with price.