Bitcoin on the Brink of Crisis: Security Risks Lurking

As a pioneer of digital currency, Bitcoin is known for its decentralized and secure nature.

However, a security expert, Justin Drake, recently warned of a serious threat that could shake the continuity of the Bitcoin network. He called this situation a “time bomb” that must be addressed immediately.

The Core of the Problem: Declining Miner Motivation

Based on information we quoted from Beincrypto media, Drake highlighted the drastic decline in revenue from Bitcoin transaction fees, which are now at their lowest level in 13 years, less than 10 BTC per day.

Transaction fees only account for about 1% of total miner income, with most of it coming from block rewards—new coins given as an incentive to secure the network

However, this block reward is halved every four years through a halving event. In April 2024, the reward dropped to 3.125 BTC per block, and this trend will continue until it reaches Bitcoin’s maximum supply limit of 21 million coins.

The Bitcoin community has been optimistic that transaction fees will increase to offset the decline in block rewards, ensuring miners remain motivated.

Unfortunately, the data suggests otherwise: transaction fees are actually decreasing faster than block rewards.

A Bold, Controversial Solution

To address these threats, Drake proposes two radical solutions:

• Removing the 21 Million BTC Supply Cap: By increasing the number of coins, miners could continue to receive sufficient rewards to keep the network secure.
• Moving to Proof-of-Stake (PoS): Replacing the Proof-of-Work (PoW) system with PoS would reduce the reliance on financial incentives for miners.

Both of these proposals go against the basic principles of Bitcoin, sparking heated debate in the crypto community.

Critical and Alternative Views

Some argue that transaction fee revenue should be measured in US dollars, not BTC. They also argue that the problem stems from Bitcoin’s departure from its original vision as a means of everyday payment.

Furthermore, there are concerns that an excessive focus on technical solutions could overlook the social and economic aspects that influence Bitcoin’s widespread adoption.

Conclusion: Bitcoin’s Uncertain Future

Threats to Bitcoin’s security are not just technical issues; they also involve the challenge of balancing economic incentives with the value of decentralization.

The crypto community needs to have a deep discussion and find the right solution to ensure Bitcoin survives in the future.