In a Tale of Two Opposing Views, Bitcoin Enthusiast Says Security Won’t Suffer Due to Block Reward Reduction
Linux Kernel developer, also part of Blockstream, Rusty Russell, expressed his concerns regarding block rewards and how they are decreasing. He shoots back at original post published by Dan Held, who made arguments as to why Bitcoin’s security is fine, and it seems like Giacomo Zucco is siding with the latter.
— TheRustyTwit (@rusty_twit) May 28, 2019
As per Held:
“I hypothesize several hundred billion, in present value USD, would be an adequate security budget since it would be very difficult for a government to justify such a waste of an expense to just 51% attack the tip of the Bitcoin blockchain.”
In response to the claims made in the aforementioned post, Russell gives an example that explains why we must be concerned about Bitcoin’s security as we move towards fees. Here’s what he had to say:
“Let’s assume we want [the security budget] to cost $700 Million USD to undo 100 blocks […] at that point, miners’ coin start disappearing, and chaos ensues. That implies we’re paying $700 Million USD in fees per 100 blocks, so each block costs $7M USD in fees […] We can squeeze about 10900 inputs and outputs into a block, giving us a fee of $700 per transfer.”
This example depicts the effects of the removal of said subsidy not only leaves many questioning the crypto giant’s security, but leaves traders with outrageous fees. Upon visiting his Medium post, one may come across changes, which were made according to the heated discussion that took place, as seen in the comments below:
Figure 1.1: Obtained From TheRustyTwit Account
All this being said, Zucco seems to share similar reasoning to that of Held, emphasizing that block subsidy will not drop as a result of purchasing power reports, AMB Crypto. The enthusiast explained that the halving process would only impact the nominal stats, but not so much purchasing power. If anything, he expects halving to potentially increase block subsidy.
As for factors that have an effect on block subsidy, Zucco believes to include the success that comes from Bitcoin adoption. This event could also increase transaction fees, which seems to be another concern for Russell, however, Zucco only sees that happening when the halving process reaches the
“final cut-off point […] that was far in the future.”
Ultimately, the enthusiast trusts that with Bitcoin’s success and exposure, one can immediately expect a larger increase in block space in comparison to the reduction in block subsidy.
Who are you siding with? Do we really have to worry about Bitcoin’s security and the reduction in block subsidy? Let us know why or why not in the comments below!