Will #Bitcoin die in 2 halvings?
The security of Bitcoin’s transaction finality is ensured by miners’ computing power, called hashrate.
There is a known theoretical attack called the “51% attack”: if an actor controls more than half of the computing power (hashrate), they could manipulate the network by rewriting recent blocks in the blockchain to perform double spends, censor certain transactions, and generally undermine the irreversibility of payments.
Carrying out a sustained attack would require secretly creating an enormous mining capacity, with data centers, power plants, and millions of specialized ASICs. Estimated cost: tens of billions of dollars and several years of preparation.
It would also be possible to try renting mining capacity, acquiring existing mining companies, or taking control of mining pools (which group miners together in cooperatives). In practice, this would also cost a fortune and wouldn’t be discreet. Furthermore, if a pool were corrupted by a malicious actor, miners would immediately leave it.
On paper, everyone agrees that under current conditions, the risk of such an attack is unlikely.
However, the debate lies elsewhere: if miners’ revenues—currently mostly from block rewards—fall too low, many could give up, leading to a drop in hashrate and thus lowering the cost of taking control.
Currently, transaction fees make up less than 1% of miners’ income, and in two halvings’ time, the block reward may become too small to justify mining on its own. If fees don’t rise, the network’s “security budget” could become insufficient to deter an attack.
According to a study by Justin Drake (researcher at the Ethereum Foundation), even with BTC at $10 million, the weakness of transaction fees would make it possible to carry out a continuous 51% attack for about $20 billion—a small amount compared to the $20 trillion total Bitcoin market capitalization at that point.
So, is Bitcoin doomed to die?
It’s not that simple, and here’s why.
First, there is a decoupling between hashrate and Bitcoin’s price. A drop in hashrate doesn’t necessarily mean a drop in price. Today, Bitcoin’s security can be considered “excessive,” and if it falls, nothing necessarily happens. The network is programmed to adapt and rebalance itself to cope with both increases and decreases in hashrate.
If we assume a malicious actor is willing to invest an enormous sum to attack the network (for ideological reasons, with theoretically infinite willingness to lose money), we must also assume that Bitcoin stakeholders won’t just sit idly by.
In practice, an attack would likely involve paying miners more than they could earn over several years of normal operation (with the attack itself destroying their business). This would logically be preceded by a massive sell-off of their Bitcoin holdings—a major red flag that something was being prepared. Perhaps the attacker would also buy up Bitcoins to remain discreet, but there’s likely a limit to how much could be spent.
For context, let’s place ourselves in 2032, with Bitcoin at $10 million and major economic activity based on it. A competitive currency environment (in Hayek’s sense), where players like Strategy and BlackRock wield trillions.
We can already imagine these companies owning or controlling significant mining capacity—a highly strategic activity to protect their business.
It’s also not absurd to think that hundreds of thousands of entities depend on Bitcoin transactions for their operations.
Once the attack is launched, what happens in response?
Users, competing to have their transactions validated and urgently needing confirmations, would rationally increase the fees they offer. Seeing rewards rise sharply, miners could reconnect their infrastructure. Initially corrupted miners might defect to chase these massive rewards.
Full nodes (which enforce the protocol’s rules) could unite in a decentralized way to massively reject malicious blocks.
The generally accepted confirmation threshold could rise from 6 to 12, making the attack even harder to sustain.
Institutions and ecosystem actors could invest significant sums to protect their capital; these amounts could even be set aside in advance to reassure shareholders and strengthen confidence.
The “tragedy of the commons” (recognizing danger but doing nothing, expecting others to act) doesn’t apply here, because each participant needs their transactions confirmed and must therefore act.
The attack would logically cause panic in the markets, driving Bitcoin’s price down and complicating the response. This would test the resilience of major players in the sector and their will to fight for survival, resulting in a fierce battle.
Finally, there is another possible reaction axis—geopolitics. If the attacker were a state (the only actor theoretically capable of unlimited funding), we must consider the reaction of states caught as collateral damage. Perhaps by 2032, the U.S. will derive substantial revenue and stability from the Bitcoin economy. Would they let their technological crown jewels be destroyed without acting? Would they watch their strategic Bitcoin reserves melt away without reacting? The rogue state would probably be quickly identified, and one can imagine what would follow…
We are therefore in full game-theory territory, with considerations beyond mere hashrate.
In conclusion, we cannot deny the risk of such a scenario—it exists, and ignoring it would be counterproductive. However, those who push this narrative (often because they have an agenda) make the gross logical error of assuming the ecosystem would watch Bitcoin go up in flames without doing anything.
A coordinated attack on Bitcoin would be anything but trivial, and in reality, it would have no guarantee of success.
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Do you want me to also produce a shorter, more concise summary of this translation for quick reading? I can condense it into bullet