Justin Bons, founder and CIO of CyberCapital, gave a blunt and unsettling view of where Bitcoin could be headed over the next decade. In a detailed note shared by We are heading towards total collapse. In the next 7-11 years this will happen in the following ways: Networks pay for security And the continued decline in block rewards.
Will declining miner payouts cause a complete Bitcoin collapse?
Bitcoin is famous for its halving cycle. This cycle reduces the block reward provided to miners by approximately 50% every 210,000 blocks (up to approximately 4 years). Bons’ criticism focuses on this incident. This is why Bitcoin’s network security finally failed and the major cryptocurrency collapsed completely.
like Each time it is divided in half, the block is cut. Bons believes Bitcoin is drifting toward a point where it can no longer reliably fund the miners who secure the network, creating a series of risks that are becoming harder to ignore with each cycle.
Many Bitcoin supporters would argue that the Bitcoin network is still very secure due to the rising hash rate. However, according to Justin Bons, advances in mining hardware are reducing the cost of hash generation, so hash rates may rise even while actual security is weakened. The most important thing is how much money you have. It was actually created by miners.That’s because those numbers represent the profitability and costs that attackers must match or exceed.
A chart tracking block rewards and miner profits shows that in economic terms, Bitcoin’s security is: It’s already lower than before A few years ago. To maintain security at its current level, he says, transaction fees would have to be so high that users stop using the network, or the price of Bitcoin would have to double every four years at a rate that quickly outpaces the size of the global economy.
Bitcoin miner profits. Source: @Justin_Bons on X
Prediction: Bitcoin will plummet in 2-3 halvings
The 7-11 year period described for the Bitcoin crash is directly tied to Bitcoin’s halving schedule. According to industry experts, the cost of a long-term attack on the Bitcoin network could fall into the realm of making such an attack financially attractive within two or three halvings.
If miner payouts are low enough, Bons believes that the potential rewards from attacking multiple exchanges or protocols can outweigh the costs of carrying out the attack. The most realistic scenario for this would be using a double-spend attack against the exchange.
An attacker who controls 51% of the total mining power can deposit Bitcoin, exchange it for other assets, withdraw those funds, and then rollback the blockchain to reclaim the original coins.
He also highlights data showing that Bitcoin’s security budget has been trending downward for several years compared to its overall market value. This means that as Bitcoin grows larger, it does not automatically become more secure.
Bitcoin security budget (%) relative to market capitalization Source: @Justin_Bons
This forces Bitcoin to reach its final breaking point. This is where the network either increases the fixed supply limit of 21 million to restore miner incentives, takes action that will likely split the chain, or the entire Bitcoin ecosystem risks a double-spend attack.
Featured image from Unsplash, chart from TradingView
editing process for focuses on providing thoroughly researched, accurate, and unbiased content. We adhere to strict sourcing standards and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of the content for readers.
