Bitcoin’s Long-Term Security at Risk as Low Transaction Fees Fail to Replace Diminishing Block Subsidy

B. Ali
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Bitcoin’s security model has once again become a major topic of discussion among industry experts, as transaction fees remain too low to adequately replace the diminishing block subsidy.

 

Ethereum Foundation researcher Justin Drake and Bitcoin Core developer James O’Beirne have both raised serious concerns regarding Bitcoin’s long-term sustainability and network security.

Low Transaction Fees Threaten Bitcoin’s Security Model and Proof-of-Work Sustainability

Justin Drake warned that Bitcoin’s current security budget is “unsustainable” without the block subsidy that miners currently receive. He highlighted that since 2016, transaction fees have only represented about 1% of miners’ total revenue per block. This failure to generate sufficient fee income puts the network’s security at risk as the block subsidy continues to decline over time.

Drake explained that if fees remain at current levels, Bitcoin’s hashing power — the critical infrastructure that protects the network — would shrink drastically, increasing the likelihood of 51% attacks.

Drake also emphasized the disconnect between Bitcoin’s rising market valuation and its security funding. If Bitcoin reaches $1 million but fees remain unchanged, miner revenue would only be about 10% of today’s levels, resulting in significantly reduced network protection. “Bitcoin would be a $20 trillion asset secured by just one-tenth of today’s hashing infrastructure,” he noted.

Potential Solutions: Tail Emissions or Consensus Mechanism Shift

To address these challenges, Drake suggested two possible paths: introducing “tail emissions,” which would mean lifting Bitcoin’s hard cap of 21 million coins to provide ongoing miner incentives, or transitioning away from the proof-of-work consensus mechanism altogether, possibly toward proof-of-stake. He stressed that while Bitcoin is designed to be “antifragile,” the current security funding problem — the “elephant in the room” — is not being adequately addressed.

James O’Beirne, a Bitcoin Core developer, agreed with these worries. He said that future miners and the Bitcoin community might have to adopt tail emissions to keep miners earning enough and to protect the network’s security. However, making this change would go against Bitcoin’s key rule of having a fixed total supply, which raises tough questions about how Bitcoin will be governed and designed going forward.

Implications for Bitcoin’s Future Security and Sustainability

This emerging debate highlights the critical tension between Bitcoin’s fixed supply model and the economic incentives needed to secure the network. As block subsidies diminish over the coming decades, the reliance on transaction fees to fund mining operations becomes increasingly important. Yet, with fees remaining persistently low despite Bitcoin’s growth, the network’s security could weaken significantly, potentially exposing it to vulnerabilities.

Market participants and developers now face difficult choices: accept protocol changes like tail emissions, which could undermine Bitcoin’s scarcity narrative, or explore a consensus shift, which would be a fundamental departure from Bitcoin’s original proof-of-work design. Either path carries risks and trade-offs, underscoring the urgent need for the Bitcoin ecosystem to confront these challenges head-on to ensure its long-term viability.

About B. Ali PRO INVESTOR

Live webinar speaker and derivatives (Forex, Crypto, and Indices) analyst with a broad range of skills for evaluating financial data, investment trends, technical analysis, fundamental analysis, and the best ways to strategies investment selection.  Expertise: Trading Psychology; Speculative Positioning & Market Sentiment; Technical & Fundamental Analysis.