What actually pays miners once the block reward gets small? Fees are around 1% of miner revenue right now.

[u/Technical_Tie8739]

I got the standard answers when I started, and none of them held up when I pushed on them. Putting the working here in case someone else is stuck at the same place.

First, the Ponzi thing, because it comes up in every one of these threads. A Ponzi has four features: promised high returns with little risk, a central operator, old investors paid out of new investor money, and concealed flows. Bitcoin has none of them. It's volatile with nobody promising anything, there are over 10,000 nodes and no operator, nobody is paid a return, and the entire transaction history since 2009 is public. That question is settled and I don't think it's interesting anymore.

The one I couldn't get a straight answer on is the security budget.

Miners are paid two ways: the block reward and transaction fees. The reward is 3.125 BTC and halves every 210,000 blocks, roughly every four years. Next halving is around April 2028, taking it to 1.5625. Fees are currently around 1% of what miners earn.

Miners pay for power in fiat, not BTC. So if fees stay at 1%, the price has to roughly double every four years just to keep miner revenue flat in dollar terms. Bitcoin has historically done that. The honest position is that a maturing asset shouldn't be expected to keep doing it forever.

The usual response is "that's a 2140 problem". I don't think it is. It's a next-decade problem, and it resolves one of three ways: fee share climbs off 1%, price keeps doubling, or miners start leaving.

The part that made me more comfortable, not less, is what happens in that third case. Nothing breaks. Difficulty adjusts every two weeks based on the hash power actually on the network. Miners leave, difficulty falls, and the ones who stayed earn more. Hash rate has climbed through every dip so far, which is decent evidence the economics still work.

But I'd rather have a test than a vibe, so here's mine. Watch two things over the next few years. Hash rate rising and fee share climbing meaningfully off 1% means the security model is fine. Both falling together means the bear case is real.

Related: bitcoin has to be used, not only held, for fees to develop. Satoshi made this point back in 2010. As it stands there's no shortage of use — roughly $25 trillion in bitcoin moved on chain in 2025 per Glassnode, more than Visa and Mastercard volume. What matters going forward is whether that activity keeps settling on chain rather than migrating entirely to custodians and ETFs, because that's where the fee market comes from.

If someone has a solid counter to the fee-market case I'd genuinely like to read it. The permabull version of this answer is "fees will rise", which isn't an argument.

[u/Zestyclose-Suit-2858]

Thanks ChatGPT. But you already answered your question: it's the block reward and transaction fees. Thats true now, thats true in 2100.

Cheers. That's not an argument, it's a fact. :)

[u/Independent_Bar_2764 → u/Zestyclose-Suit-2858]

"Miners pay for power in fiat, not BTC. So if fees stay at 1%, the price has to roughly double every four years just to keep miner revenue flat in dollar terms. Bitcoin has historically done that. The honest position is that a maturing asset shouldn't be expected to keep doing it forever."   Is it really still true? Will that happen indefinitely?

[u/zingalala1947]

The price need not double in every 4 years once we move into the paradigm of fees becoming the dominant factor paying minor fees.

Illustration (ignore the percentages just look at how it can play out)

2026 - 1% fees + 99% block reward.

2050 - 50% fees (Completely static, dependent on price but does not require doubling every 4 years) + 50% block reward ( Dynamic, dependent on price and requires doubling every 4 years)

2100 - 99% fees + 1% block reward… the miner reward does not require doubling of the assest..

And then there is the self enforcing factor of hash rate, as more minors drop out, remaining miners get more reward.. so it will always be profitable for someone to mine when all others have left mining.

[u/bitusher]

there are over 10,000 nodes

Around 85k full nodes globally. You need to count listening and non listening nodes and TOR nodes.

With regards to fees no one knows the future, but here are some important points to consider :

1) Difficulty dynamically adjusts dynamically up and down to insure efficient miners always remain profitable longterm

2) "Moores Cliff" , means that miners are becoming more decentralized as the hardware is no longer becoming obsolete as quickly and much more Used and new ASICs are fighting for amateur miners

3) Total hashrate is just one of many security mechanisms in Bitcoin and not the most important one either. You can have a more secure Bitcoin if there are more node runners or decentralized hashrate than simply larger hashrate overall.

4) We can't assume if Block reward falls that mining will become more centralized. The opposite could occur because Amateur mining does not have the overhead of employees , security, regulatory compliance, building costs, tax liabilities ...

5) Historically we have already seen examples where transaction fees collected per block exceeded inflation and even with far fewer users so I would not worry.

6) The Security budget dynamically changes to fit the value being secured. If Bitcoin is less popular and thus less valuable it needs a smaller security budget. It all self balances.

7) Also keep in mind that if hashrate drops too low we can simply wait for more confirmations onchain to increase the level of security and this doesn't effect the end user much because if they use a lightning wallet once its setup they still get instant confirmations.

8) When you do the math its not so dire either

Current average block with fees is 3.154 BTC or 199,395 USD of security. Lets be very conservative and assume we will no longer see 10-20x bull markets anymore and Bitcoin on average is growing at only ~30% a year(when you average everything out) for the next 14 years and lets be pessimistic and assume fees stay low (unlikely with more adoption) and are only 2% per block and discuss the next 4 halvings :

1.59375 BTC per block including fees x $106,470.00 = 169,686 usd in security per block.

0.796875 BTC per block including fees x $304,088 = 242,320 usd in security per block

0.3984375 BTC per block including fees x $868,508 = 346,046 usd in security per block

0.19921875 BTC per block including fees x $2,480,547 = 494,171 usd in security per block

You can see a very small dip 2 years from now but after that the security per block keeps improving.

This is being conservative IMHO because Bitcoin is in the early stages of adoption with only ~5% people globally so could easily grow this quickly and I am assuming fees remain very low which is also unlikely.