The Long-term Sustainability of the Bitcoin Network: Challenges and Opportunities

Around the year 2140, the Bitcoin network will reach an important milestone - all 21 million Bitcoins will have been issued. This means that miners will no longer receive newly minted Bitcoins as rewards, and will only be able to rely on transaction fees to maintain operations. This change has raised concerns about the long-term security of the Bitcoin network.

Main Points

• After the year 2140, block rewards will disappear. Miners will only be able to earn income through transaction fees paid by users, and miners are crucial for processing transactions and ensuring network security.

• The gradual reduction of mining rewards raises questions about the long-term security of Bitcoin, as these rewards effectively constitute the "security budget" of the Bitcoin network.

• The reduction in security budget may increase the risk of a Bitcoin network suffering a 51% attack, or lead to a more centralized network.

• Optimists believe that the rise in the value of Bitcoin assets and the future increase in demand for block space will make the model relying solely on transaction fees still economically viable for miners.

The scarcity of Bitcoin is one of its most famous characteristics and the reason it is referred to as "digital gold." To ensure this scarcity, the rewards paid to miners are gradually reduced every four years through a "halving" mechanism. However, this mechanism also presents a long-term challenge.

The main incentive for miners in the Bitcoin network - the reward for newly generated Bitcoins, (, also known as the block subsidy, ), will completely disappear around the year 2140. The block subsidy essentially acts as Bitcoin's security budget, used to pay miners to ensure network security. This raises a key question:

Is relying solely on the remaining transaction fees sufficient to maintain the security of the network?

Bitcoin Incentive Model Analysis

To understand the challenges of the post-subsidy era, we need to examine the current incentive mechanism that secures the Bitcoin network. Every ten minutes, a miner verifies a new transaction block and receives a block reward composed of two parts:

• Block subsidy: This is the preset number of newly generated Bitcoin. When Bitcoin was first launched, the subsidy for each block was 50 Bitcoins. It halves every four years, an event known as "Bitcoin halving." This mechanism will distribute 21 million Bitcoins over several decades and is currently the main source of income for miners.

• Transaction Fees: This is the fee that users pay during a transaction to incentivize miners to include their transaction in a block. It can be seen as an extra "tip" for Bitcoin miners, helping those who wish to expedite transaction confirmations, thereby creating a competitive market environment. Currently, the average transaction fee for Bitcoin is approximately $1.30 per transaction.

Bitcoin Halving: Reducing the Issuance Rate

Every Bitcoin halving is a periodic efficiency test for the mining industry, as the halving effectively reduces miners' income by half. This ensures that only the most efficient miners can profit, while less efficient miners may be eliminated. However, the potential negative effect is that it may temporarily lead to a decrease in the overall network's hash rate.

The computing power of the Bitcoin network is the total computational ability used to ensure network security. When miners stop working, the computing power declines. A decrease in network computing power means that the Bitcoin network is more susceptible to network attacks such as the 51% attack, where a single entity controls enough computing power to disrupt the blockchain.

( 2025 Bitcoin block reward

To further illustrate the importance of block subsidies to miners, here are the details of the rewards obtained for successfully mining a Bitcoin block.

According to blockchain data, by July 2025, each new Bitcoin block will contain approximately 0.025 Bitcoins in transaction fees. As of April 2024, the block subsidy is 3.125 Bitcoins.

In short, the "salary" for Bitcoin miners who mine a block:

• Guarantee rewards ) newly generated Bitcoin ###: 3.125 Bitcoins
• Additional "tip" ( from transaction fees ): about 0.025 Bitcoins

Total earnings per block: approximately 3.15 Bitcoins.

Transaction fees make up only a small part of the total income for miners, which means that in a market relying solely on transaction fees, miners are almost certainly unable to make a profit.

Discussion on the Feasibility of Bitcoin Economy in the Post-Subsidy Era

Relying solely on Bitcoin transaction fees is insufficient to ensure the security of the Bitcoin network in the current market. However, optimists believe that by 2140, demand will drive transaction fees to levels far above current ones, while pessimists foresee a crisis. The main arguments for each viewpoint will be explored below.

( Pessimistic Argument: Security Budget Reduction

The basis of the pessimistic view is simple: the historical trend of transaction fees has not shown an increase substantial enough to compensate for the reduction in subsidies. Critics worry that each halving will cut the security budget, gradually diminishing the network's security.

) Optimistic Viewpoint: Strong Fee Market

Optimists believe that Bitcoin will be supported by its continuously rising asset value and the growing demand for blocks. First of all, with the help of Bitcoin's deflationary design, the network will develop into an asset class worth trillions of dollars, so even a small proportion of Bitcoin transaction fees will bring considerable income to miners in the future.

Secondly, the demand for the blockchain space itself will undergo fundamental growth, which may manifest in the form of large institutional settlements, layer two scaling solutions, or some yet-to-be-discovered new innovations. Ultimately, these factors will drive up transaction fees, making them economically viable in the future.

Potential Risks of Reduced Security Budget

The decline in security budgets may lead to a large number of Bitcoin miners shutting down, which would reduce the total hash rate of the Bitcoin network, potentially triggering a series of risks and putting pressure on the integrity of the network.

51% attack

The most concerning threat is the 51% attack, where an entity controlling more than half of the network's computing power can reverse transactions ###, double-spend ###, or censor the network. The security budget is a primary line of defense; the higher the budget, the more computing power is supported, and the higher the cost of an attack. Nowadays, for rational economic agents, the cost of launching such an attack is prohibitively high, as it is likely to lead to a significant drop in Bitcoin prices, thereby reducing the value of the attacker's own hardware. However, for geopolitical reasons, state-level actors may be willing to incur such losses to disrupt the network. As the security budget decreases, the cost of attacks lowers, increasing the likelihood of this threat in the long run.

( Hashrate Fluctuation

A more direct risk is the surrender of miners, meaning that the decrease in earnings due to Bitcoin halving forces a large number of miners to shut down their mining machines, resulting in a sharp decline in hash power. Although difficulty adjustments will correct this, the rapid withdrawal of miners may create a fragile window period in the short term.

Bitcoin Innovation as a Solution

The Bitcoin community is actively developing solutions to promote network adoption and mitigate the risks arising from the gradual reduction of the Bitcoin security budget. Here are some of those solutions.

) Layer2 solution

One solution to the limited capacity of the Bitcoin blockchain is the L2 blockchain. L2 is a sub-blockchain built within the main blockchain, transferring transactions from the main blockchain to these L2s to improve transaction speed and reduce costs.

L2 solutions like the Lightning Network enable Bitcoin to be used for everyday transactions, which has seen a certain level of adoption in Vietnam. The Bitcoin community in Vietnam frequently collaborates with local merchants, cafes, and markets to promote and support the use of Bitcoin payments powered by the Lightning Network. If L2 solutions succeed, it will drive the Bitcoin network from specialized applications to everyday applications, thereby increasing the transaction fees on the main Bitcoin blockchain network.

Bitcoin 符文### Runes

The runes that became popular in 2024 are a type of token standard that utilizes the Bitcoin UTXO model and the OP_RETURN opcode. Runes enable the creation of meme coins and community tokens on the Bitcoin blockchain. At its peak, runes drove the average transaction fee of Bitcoin to a historic high of $127 per transaction. Although market interest in runes has waned, this innovation demonstrates that new use cases could potentially drive up Bitcoin transaction fees, paving the way for a Bitcoin economy supported solely by transaction fees in the future.

Future User Experience

For ordinary users, interacting with Bitcoin may be a multi-layered experience. Sending transactions directly on the first layer is expected to become expensive, only for large transfers. For everyday transactions, users will almost certainly interact with Bitcoin through L2 solutions like the Lightning Network, which can provide instant and low-cost experiences, or by using wrapped Bitcoin. This shift means that the user experience for small payments will still be viable but will be achieved on a different technological layer than the main blockchain.

Long-term Outlook for Investors

For investors, the end of block subsidies has triggered a critical conflict between the two core attributes of Bitcoin, ( scarcity and security. Investors are attracted to Bitcoin's fixed supply, but they now have to face the reality that the network's security is dynamic and will depend on the future fee market. If the network supporting the scarce asset is perceived to have vulnerabilities, then its long-term value is questionable. Ultimately, the value of Bitcoin derives not only from its technological characteristics but also from the market's collective confidence in its ability to remain secure.

Conclusion

The day the last new Bitcoin is mined does not signify the end of Bitcoin, but rather the beginning of its ultimate test. The end of block subsidies is the final state anticipated by the protocol, and the ecosystem has over a century to adapt to this challenge. The long-term security of Bitcoin will be determined by a complex interplay of various forces: technological innovations in L2 solutions, the economic evolution of the fee market, and the social consensus surrounding Bitcoin as a global settlement layer.

It is important to note that this article discusses concerns that may exist in the distant future of Bitcoin. Given the long time interval of up to a century from now until 2140, its content is highly speculative.

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