1

As far as I understand Bitcoin mining the block reward consists of newly emitted and transaction fees. However, this new emission will disappear in the future and there will be only be the transaction fees.

Therefore, mining will be profitable if Bitcoin has a certain amount of on-chain transactions.

My impression is that people in future will rather rely on off-chain transactions due to the long block times.

My question is: Could it be a long-term security risk for Bitcoin if there are too few on-chain transactions after the last Bitcoin was mined?

Improve this question
1

1 Answer 1

Reset to default
2

Off-chain protocols like Lightning and sidechains can offer instant settlement but they come with their own set of trade-offs. Lightning requires you to be online 24/7 to monitor the chain and the private keys for your funds are hot rather than in cold storage. Sidechains, depending on the design, require limited trust in third parties to peg in and out. Hence onchain transactions will always offer the most security and minimize trust in third parties and hence I personally believe that as long as Bitcoin is still relevant and has mass usage when the block subsidy runs out (approximately 2140) then there will be demand for block space; potentially Lightning channel opens and closes, high value onchain transactions and whatever other higher layer protocols have been designed by then.

If I'm wrong and there is no or limited demand for block space then yes this could be a security problem. But 2140 is a long way away and there is a lot of work to do to scale and secure Bitcoin against future threats so that it is still relevant in 2140 regardless.

Improve this answer

Not the answer you're looking for? Browse other questions tagged or ask your own question.