is the most secure cryptocurrency with the most secure blockchain, remind the legions of Bitcoiners who argue that the cryptocurrency's increasing hashrate is enough to ensure that it never succumbs to a .
However, skeptics argue that Bitcoin's halving block rewards put this much-fabled security at risk. By reducing the quantity of new BTC given to those who mine the cryptocurrency, there will be less financial incentive to maintain the Bitcoin network's high hashrate, in theory making 51% attacks more feasible.
Nonetheless, other commentators believe that the increasing value of transaction fees will be enough to ensure Bitcoin's security. Because even with declining (or non-existent) block rewards, Bitcoin's rising value and adoption would mean that the rewards accruing from transaction fees will incentivize mining, they say.
The pessimistic view of Bitcoin security
It's already common knowledge that will take place this May, when the reward for being the first to confirm a block will be reduced from BTC 12.5 to 6.25. After this, the next halving will take place after another 210,000 blocks have been mined, and so on, until Bitcoin's supply cap of BTC 21 million has been reached in around 120 years.
The next three halvings will reduce the block rewards down to BTC 3.125, 1.56250000 and then 0.78125000. According to Emin Gun Sirer, CEO of AVA Labs, the developer of the AVA blockchain, such reductions will be enough to seriously weaken Bitcoin's security.
"As the amount of awards given to the miners dwindles down, the security of the network will drop," he says. "If the security drops sufficiently, we may even see massive double-spend attacks targeting exchanges. This would, in turn, trigger exchanges to extend their confirmation times. At some point, the attackers might have access to so much hashpower that no reasonable number of confirmations may be sufficient to guarantee security."
Sirer adds, "I give Bitcoin at most 3 more halvings, that is 12 years, before the rewards given to the miners drop to the point where intervention is necessary."
As reported, he argues that removing Bitcoin's supply cap would solve this.
The optimistic view of Bitcoin security
On the face of it, Sirer's argument looks plausible - block rewards are unquestionably getting lower, and after 30 halvings they will be reduced to nothing.
