Lawrence White, a prominent professor of economics at George Mason University, has highlighted a potential future security threat that faces Bitcoin (BTC).
Speaking during an interview with David Lin published on October 22, Professor White expressed his concerns regarding the long-term sustainability of Bitcoin’s security, particularly about the evolving reward model for miners.
While quantum computing has long been a topic of discussion in the world of cryptocurrencies, the scholar was unfazed by its potential impact on Bitcoin. Instead, he pointed to a different challenge on the horizon while noting that Bitcoin has emerged as hack-proof.
“People have worried about the miners colluding to attack Bitcoin, but that wouldn’t be in their interest to do. So far, it’s proven hack-proof, and there are people who worry that in the long run, as the reward model for Bitcoin changes,” he said.
What to expect after all Bitcoin is mined
He pointed out a potential issue that might materialize nearly a century from now when no more Bitcoin will be created through mining, and the entire reward for miners will consist of transaction fees.
“At some date 100 years from now, there will be no more Bitcoin created, so it would be all transaction fees, and people worry that that might not be enough to get enough miners to keep the system secure,” he cautioned.
It is worth noting that, currently, the primary incentive for miners is the reward of newly created Bitcoin, with transaction fees playing a secondary role. As Bitcoin mining progresses, the rate at which new Bitcoin is created decreases, and miners must increasingly rely on transaction fees as their primary source of income.
The block reward consists of both newly minted Bitcoin and transaction fees. However, with the scheduled reduction in Bitcoin creation and eventual completion of mining, the reward will entirely rely on transaction fees.
While Professor White’s concern may seem remote and speculative, Bitcoin’s core community has a history of addressing security concerns and implementing improvements.
Bitcoin’s role as money
On the other hand, the scholar commented on the possibility of Bitcoin serving as money even as proponents tout the cryptocurrency as a possible means of transaction in the future. According to White, the chances of Bitcoin serving as money are minimal. However, he believes other cryptocurrencies can come up and take up the role.
“People have proposed that it [Bitcoin] will become the world’s money someday, and I’m saying I don’t see that being very likely. Other cryptocurrencies with a different design that gives them a more stable purchasing power could possibly play a wider role, and of course, stablecoins have grown to play a pretty substantial role,” he said.
In the meantime, Bitcoin is still pushing to hit the $30,000 mark. By press time, Bitcoin was valued at $29,906 with weekly gains of 11%.
Watch the full interview below: