Bitcoin’s long-term security budget problem: Impending crisis or FUD?
Critics argue the declining Bitcoin block reward subsidy is a “ticking time bomb” for Bitcoin’s security. Here are some potential solutions.
The key selling point of Bitcoin as a store of value has everything to do with the credibility of its monetary policy. As Bitcoin inventor Satoshi Nakamoto once wrote, the rules of the system were set in stone when the network first launched, and those rules included the 21-million-Bitcoin supply cap and the related issuance policy maintained by the roughly four-year halving cycle.
But are those rules really set in stone? Is there really no chance Bitcoins monetary policy will change at some point in the future?
Some critics believe that after the block reward drops too low as a result of the halvings and if transaction fee revenue has not risen substantially there will no longer be enough incentive for miners to secure the network. They argue the Bitcoin network may be forced to increase the supply as a result.
