Ethereum Researcher Sounds Alarm: Bitcoin’s Fee Model Could Undermine Security

Bitcoin’s security might be sitting on a ticking time bomb—at least according to one Ethereum Foundation insider. The researcher argues that Bitcoin’s transaction fee structure could leave its blockchain vulnerable long-term, as block rewards dwindle and miners scramble for incentives.

Here’s the kicker: while Bitcoin maximalists scoff at ’fee market’ critiques, the numbers don’t lie. When the last satoshi gets mined (spoiler: around 2140), will transaction fees alone keep the network bulletproof? Or will miners bail faster than Wall Street during a flash crash?

One thing’s certain: in crypto, even ’digital gold’ isn’t immune to a little creative destruction.

Bitcoin fees decline

According to Drake, Bitcoin’s fee structure has failed to evolve alongside its halving schedule.

He noted that while the three recent halving events have reduced block rewards over the past eight years, transaction fees have not risen enough to offset the drop.

According to him, fees now contribute just 1% of total miner revenue, down from earlier levels and hovering NEAR a 13-year low of roughly 6.5 BTC per day.

Considering this, Drake stated:

“Bitcoin’s security model is broken. If bitcoin gets taken over, the fallout could take the entire crypto ecosystem with it. The systemic risks can’t be ignored.”

Drake also challenged the long-held assumption that fees WOULD naturally increase and eventually replace block rewards.

On the contrary, he argued that fees are shrinking, and if miners had to rely only on fees, their revenue could plunge 100x. This would reduce Bitcoin’s hash power to just 1% of its current strength.

According to Drake:

“That’s the trajectory we’re on. The 21M cap breaks security, it’s self-destructive. It should be clear now Satoshi made an ooopsie.”

Rising prices won’t save Bitcoin

Drake dismissed the idea that surging Bitcoin prices could resolve the issue.

He outlined a scenario in which Bitcoin hits $1 million per coin, yet still only covers 10% of today’s security cost if fee levels remain unchanged.

He noted:

“Today, Bitcoin is secured by 20 GW — the equivalent of 10M space heaters. A 90% cut in miner revenue would bring that down to 2 GW of security — 1M space heaters. For context, Texas alone produces 80 GW. There’s no way a $20T asset can be secured by 2 GW.”

Even if Bitcoin were to hit $10 million per coin, making it a $200 trillion network, Drake argued the cost to mount a 51% attack would remain trivial relative to its market cap.

He estimated that building 20 GW of hashing infrastructure would cost just $20 billion, only 0.01% of Bitcoin’s hypothetical $200 trillion value.

Solutions?

Drake concluded that Bitcoin’s current Proof-of-Work model may not be viable over the long term without structural adjustments.

So, he proposed several solutions, including revising the fee market or introducing tail issuance. The latter would involve lifting Bitcoin’s 21 million coin supply cap to maintain ongoing miner incentives.

In addition, he suggested a move to Proof-of-Stake (PoS), a system already used by Ethereum to secure its network.

Still, Drake acknowledged that his ideas face serious resistance within Bitcoin’s cultural and ideological framework.

Meanwhile, he also highlighted that some community members have proposed vague suggestions that BTC could adopt Proof-of-Authority through a consortium of mining pools. But he pointed out that there are few details on it.

Considering this, Drake concluded:

“Bitcoin is meant to be antifragile. Yet the elephant in the room in the room is not being addressed. We can burry our in heads in the sand. But the fundamentals are getting louder.”