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Today at 12:14:34 PM |
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Everyone here knows the block reward gets cut in half about every four years, and most people see the halving as a good thing for the price, but here is the thing, I think the more important question is what happens to security when the subsidy becomes small. Right now miners are paid mostly by the new coins in each block, and fees are only a small part of that. That works today, which means that nobody feels the problem yet, but the subsidy goes down every cycle and at some point fees have to carry most of the cost.
I don’t think it is a disaster, because the market has time to adjust and miners can only spend what they earn, so hashrate will settle where it is profitable. Also, if Bitcoin is used more as a settlement layer, then fewer but bigger transactions can still produce a healthy fee market. But I also don’t think we can just assume it will work out, since there is no past example of a network this large running mostly on fees.
The risk I see is that low fee income means lower hashrate, and lower hashrate means a cheaper attack. It does not have to happen, but it is a trade off people should talk about before it becomes urgent. What do you think, will fees be enough on their own, or does Bitcoin need something else to keep miners paid?
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