Lawrence White, one of the leading economics professors at George Mason University, underlined a potential security threat that Bitcoin (BTC) may face in the future. Here are the details…
White is worried about Bitcoin
Speaking during an interview with David Lin published on October 22, Professor White expressed concerns about the long-term sustainability of Bitcoin’s security and, in particular, its evolving reward model for miners. While quantum computing has long been a debated topic in the cryptocurrency world, academics are unimpressed by its potential impact on Bitcoin. Instead, he pointed to a different challenge on the horizon while noting that Bitcoin is emerging as hack-resistant. White said:
People are worried about miners collaborating to attack Bitcoin, but that wouldn’t be in their interest. It has proven to be hack-proof so far, and there are people worried about this in the long term as Bitcoin’s reward model changes. What should we expect after all Bitcoins are mined?
There is also a mining problem
He pointed out a potential problem that could arise about a century from now, when no more Bitcoins will be created through mining and the entire reward for miners will consist of transaction fees. 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 of new BTC creation decreases and miners are increasingly forced to rely on transaction fees as their primary source of income. White warned with the following:
At some point 100 years from now, no more Bitcoins will be created, so there will be all transaction fees, and people are worried that this might not be enough to get enough miners to keep the system safe.
The block reward consists of both newly minted Bitcoin and transaction fees. However, with the planned reduction in Bitcoin creation and the eventual completion of mining, the reward will be based entirely on transaction fees. While Professor White’s concern may seem distant and speculative, BTC’s core community has a track record of addressing security concerns and implementing improvements.
What will be the role of BTC in the future?
On the other hand, the academic commented on the possibility of Bitcoin serving as money, despite advocates touting the cryptocurrency as a possible means of transactions in the future. According to White, Bitcoin has little chance of serving as money. However, he believes other cryptocurrencies may emerge and take on this role. White said:
People say that [Bitcoin’in] They suggested that it would one day become the money of the world, and I say that I see this as unlikely. Other cryptocurrencies with a different design that provide more stable purchasing power could possibly play a broader role, and of course stablecoins are starting to play a pretty important role.
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