2 weeks ago
Justin Drake, a researcher astatine the Ethereum Foundation, has raised alarms implicit Bitcoin’s (BTC) semipermanent security.
In a elaborate post connected May 29, Drake argued that persistently debased transaction fees connected the Bitcoin web could marque it progressively susceptible to a 51% attack, a script successful which a azygous entity gains bulk power of the blockchain’s computing power.
Bitcoin fees decline
According to Drake, Bitcoin’s interest structure has failed to germinate alongside its halving schedule.
He noted that portion the 3 caller halving events person reduced artifact rewards implicit the past 8 years, transaction fees person not risen capable to offset the drop.
According to him, fees present lend conscionable 1% of total miner revenue, down from earlier levels and hovering adjacent a 13-year debased of astir 6.5 BTC per day.
Bitcoin Network Transaction Fees (Source: Alphractal)Considering this, Drake stated:
“Bitcoin’s information exemplary is broken. If Bitcoin gets taken over, the fallout could instrumentality the full crypto ecosystem with it. The systemic risks can’t beryllium ignored.”
Drake besides challenged the long-held presumption that fees would people summation and yet regenerate artifact rewards.
On the contrary, helium argued that fees are shrinking, and if miners had to trust lone connected fees, their gross could plunge 100x. This would trim Bitcoin’s hash powerfulness to conscionable 1% of its existent strength.
According to Drake:
“That’s the trajectory we’re on. The 21M headdress breaks security, it’s self-destructive. It should beryllium wide present Satoshi made an ooopsie.”
Rising prices won’t prevention Bitcoin
Drake dismissed the thought that surging Bitcoin prices could resoluteness the issue.
He outlined a script successful which Bitcoin hits $1 cardinal per coin, yet inactive lone covers 10% of today’s information outgo if interest levels stay unchanged.
He noted:
“Today, Bitcoin is secured by 20 GW — the equivalent of 10M abstraction heaters. A 90% chopped successful miner gross would bring that down to 2 GW of information — 1M abstraction heaters. For context, Texas unsocial produces 80 GW. There’s nary mode a $20T plus tin beryllium secured by 2 GW.”
Even if Bitcoin were to deed $10 cardinal per coin, making it a $200 trillion network, Drake argued the outgo to equine a 51% attack would stay trivial comparative to its marketplace cap.
He estimated that gathering 20 GW of hashing infrastructure would outgo conscionable $20 billion, lone 0.01% of Bitcoin’s hypothetical $200 trillion value.
Solutions?
Drake concluded that Bitcoin’s existent Proof-of-Work model whitethorn not beryllium viable implicit the agelong word without structural adjustments.
So, helium projected respective solutions, including revising the interest marketplace oregon introducing process issuance. The second would impact lifting Bitcoin’s 21 cardinal coin proviso cap to support ongoing miner incentives.
In addition, helium suggested a determination to Proof-of-Stake (PoS), a strategy already utilized by Ethereum to unafraid its network.
Still, Drake acknowledged that his ideas look superior absorption wrong Bitcoin’s taste and ideological framework.
Meanwhile, helium besides highlighted that immoderate assemblage members person projected vague suggestions that BTC could follow Proof-of-Authority done a consortium of mining pools. But helium pointed retired that determination are fewer details connected it.
Considering this, Drake concluded:
“Bitcoin is meant to beryllium antifragile. Yet the elephant successful the country successful the country is not being addressed. We tin burry our successful heads successful the sand. But the fundamentals are getting louder.”
The station Ethereum Foundation researcher warns Bitcoin’s interest operation whitethorn compromise semipermanent security appeared archetypal connected CryptoSlate.
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