Who pays for Bitcoin’s security when the block reward is almost gone?

[Princeemmanuel070]

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?

[aoluain]

How is the security enabled and maintained at the moment?

Developers, Miners and Nodes!

At each halving all three groups continue to operate so when the halving events are
complete those 3 groups will remain.

This has already been factored into the algorithm and will be fine tuned as we near
the end of the halvings in about 100 years.

[JiiBs]

It’s is true that the block rewards for mining is greatly halved in every cycle, starting at 50BTC in its earliest days around 2009 to 2012 and later dropped to 25BTC by 2012 to 2016 and the trend continues to this day where it’s at 3.125BTC.

What’s worth noting through all these era is the value of Bitcoin.
In 2009 when Bitcoin didn’t have a defined price, people still mined probably because it did cost them nothing, haven’t done this from their desktop and at the comfort of wherever but, they did mined anyways. Then later on in 2010, Bitcoin has some valuation to it in cents and later a dollar and so on. On an average, the cost of a Bitcoin by 2012 was around $7-8 and miners still mined.

Then the 2012 to 2016 era saw that value rise to about $567 and if averaged across this time frame, we would find the price to be around $350-400 per Bitcoin.

While the number from block rewards might have dropped, the value of Bitcoin did appreciate. Today, those 3.125BTC is worth more than being rewarded with 25BTC in 2016 value wise when matched against eras.

In the eventuality that, miners don’t get block rewards no more, of course they would the rewarded from fees and the value for those sats would be worth the work put in and there would be a lot to be rewarded for since, the transaction might be massive at a global scale.