Bitcoin's Security Model Under Scrutiny as Expert Warns of "Time Bomb" Risk

Bitcoin, long hailed as a decentralized and secure digital currency, is now facing growing criticism from security experts over the long-term sustainability of its network. According to Ethereum Foundation researcher Justin Drake, Bitcoin’s security model may be on a dangerous path—one he bluntly called a “time bomb.”

The heart of the issue lies in how miners, the backbone of Bitcoin's Proof-of-Work (PoW) system, are compensated. Drake highlighted that transaction fees—expected to eventually replace block rewards as the main incentive—are now at a 13-year low, contributing less than 1% to miner revenue. The vast majority of miner income still comes from block rewards, which are halved every four years and are programmed to disappear entirely once the total supply of 21 million BTC is reached.

Shrinking Security Budget

Historically, Bitcoin’s design assumed that as block rewards shrink, transaction fees would rise to sustain miner engagement and protect the network. But the data suggests otherwise. Since 2016, transaction fees have failed to scale with falling block rewards. Even after the most recent halving in April 2024, where rewards dropped to 3.125 BTC, fees remain stagnant—still contributing only 1% of miner income.

Drake cautions that this dynamic is unsustainable:

“If fees were the only source of miner revenue today, the revenue would drop by 100x, and so would the hashing power. That makes the network alarmingly vulnerable—a single large mining farm could potentially carry out a 51% attack,” he warned.

Proposed Solutions—And Their Controversies

Drake floated two controversial options:

1. Removing Bitcoin’s hard cap of 21 million coins to allow perpetual block rewards.
2. Shifting from Proof-of-Work to Proof-of-Stake (PoS), similar to Ethereum’s transition in 2022.

Both ideas, however, clash with Bitcoin’s core ethos. The fixed supply of 21 million BTC is central to its narrative as “digital gold,” and a switch to PoS would challenge its foundational reliance on decentralized computing power.

Diverging Views

Not all experts agree with Drake’s concerns. Kushal Babel of Category Labs suggested that security should be evaluated in fiat terms rather than BTC.

“It’s incorrect to say fees are at an all-time low when measured in BTC. What matters for security is their value in U.S. dollars, considering BTC’s market price,” he said.

Others believe the problem lies not in Bitcoin’s code, but in how the community has evolved. Strategy analyst Lukasinho argued that Satoshi Nakamoto’s original vision—Bitcoin as digital cash—has been abandoned in favor of a low-activity, store-of-value model.

“Satoshi didn’t make an error. The mistake was turning Bitcoin into a sleeping asset. It was meant to be used frequently, which would naturally drive fees,” he noted.

A Quantum Cloud on the Horizon

Adding another layer of complexity is the looming threat of quantum computing. While a 51% attack remains difficult under current conditions, advancements in quantum technology could pose a real risk to Bitcoin’s cryptographic foundation in the future—further emphasizing the need for a sustainable security roadmap.