Ethereum Researchers Sound Alarm: Bitcoin’s Low Fees Could Spell Security Disaster

Bitcoin’s ’cheap’ transactions might come at a hidden cost—researchers warn the network could become a hacker’s playground.

As Ethereum devs point out, security isn’t just about hash rates—it’s about economic incentives. And right now, Bitcoin’s fee market looks like a discount buffet for bad actors.

Wall Street would call this ’efficiency.’ The rest of us call it cutting corners.

This meant that fees only account for around 1% of miners’ revenue over the years, and Bitcoin miners could see a 100% decline in their revenue once the complete 21 million BTC have been mined.

However, Category Labs researcher Kushal Babel disagreed with the argument, noting that denominating fees in BTC to say it is at an all-time low is wrong. According to him, the whole argument might change if BTC fees are denominated in US Dollars.

Babel argued that Drake’s opinion that the ratio of BTC market cap to the amount securing it makes the network vulnerable to a 51% attack is a weak argument at best, and the focus should be on the cost of an attack in dollars.

Higher prices may not save the Bitcoin network from attack

Meanwhile, Drake added that a rise in Bitcoin prices could be inimical to network security because it would make it harder to sustain the BTC-denominated fees. In order to explain this, he described a scenario where Bitcoin price increases but fees stay unchanged, noting that fees at the time will only cover around 10% of the security cost for the network.

He said:

“Let’s be optimistic and say BTC rises to $1M, and today’s 6.5 BTC/day in fees is maintained: $6.5M/day in fees, 10% of today’s security budget. Bitcoin WOULD be a $20T asset secured by 1/10th of today’s hashing infrastructure.”

Thus, he believes that the cost of attacking the Bitcoin network will not increase even as the price of BTC increases. This could make it possible for a 51% attack on the Bitcoin network to cost as little as $20 billion, even if the network has a market cap of $200 trillion tokens.

Drake further debunked the presumption that Bitcoin fees will increase, noting that this has not happened in the last 13 years. He added that all previous attempts to boost Bitcoin fees by increasing its utility as a transaction LAYER have failed to achieve sustainable long-term gains, with projects such as Ordinals, Liquid, Omni, Babylon, and others only creating short-term spikes.

Potential solutions to Bitcoin’s fragile security

With Drake highlighting Bitcoin’s risks, he proposed two solutions that could work for the network if fees do not increase. According to him, the solution is for Bitcoin to expand the total supply beyond the 21 million cap or for the network to switch to Proof of Stake.

Unsurprisingly, he acknowledged that these two proposed solutions are unlikely to be implemented, given that they are completely against the conventional ethos of the Bitcoin community.

However, he insisted that creating a Bitcoin VIRTUAL Machine or Proof of Authority, where the major mining pools will secure the network, is unlikely to work. Still, he called on anyone who could explain how the PoA will function to do so.

Interestingly, other users have proposed more potential solutions. Ethereum Foundation researcher Ansgar Dieetrichs recommended that Bitcoin developers end congestion pricing and increase the fee floor with the hope that the revenue is enough.

He noted that this is likely the best solution for the network, but added other options, such as Bitcoin becoming a Layer-2 on a secure PoS chain or becoming an ERC-20 token. Other solutions include mining at a loss or allowing centralized custodians and large BTC holders to donate to on-chain security.

Unsurprisingly, not everyone welcomed the opinion, especially among Bitcoin supporters. Bitcoin maxi Udi Wizardheimer criticized the opinion, noting that Drake is concerned about a security problem that Ethereum might have in 100 years, when Ethereum is struggling presently.

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