Blockchair’s Lead Developer Expresses Concerns Over Bitcoin’s Security Budget

Nikita Zhavoronkov, the lead developer of Blockchair, a cryptocurrency block explorer, has expressed his concerns about Bitcoin’s dwindling security budget. Zhavoronkov stated that the network needs to experience sustained high fees to offset the security impact of the latest halving. After the issuance of Runes following the halving, fees have returned to normal levels.

Blockchair’s Lead Developer Raises Questions About Bitcoin’s Security Budget

Nikita Zhavoronkov, the lead developer of Blockchair, a cryptocurrency block explorer, has warned about the issue of the security budget of Bitcoin and how its reduction might affect the network operativity in the future. Zhavoronkov stated that with the last halving, the security budget of Bitcoin, meaning the amount of bitcoin miners receive in subsidies and fees, had almost halved too.

Taking his worries to social media, he explained that the only way of maintaining this security budget was for the network to experience sustained high fees. Immediately after the halving, high network fees were occurring due to the issuance of Runes; nonetheless, this is not the case anymore as these have returned to almost pre-halving levels.

He stated:

To offset the security impact of the latest halving, miners need to constantly earn an extra 3.125 BTC in fees.

Zhavoronkov explained that, due to the continuous reduction of Bitcoin’s security budget, one of three things must happen: an initiative to scale Bitcoin onchain, allowing for more transactions and for miners to receive more fees; a change in the monetary policy of the
network, that could involve the removal of the 21 million BTC issuance limit; or a change in the Bitcoin consensus system, migrating from proof-of-work to proof-of-stake.

He was criticized by several X users, who stated that Bitcoin’s budget reduction was not an issue, given that while the number of bitcoin produced dropped, its price increased simultaneously. “The security budget should be measured in BTC, not USD, as the value miners secure also rises with the price,” Zhavoronkov stressed.

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