Author: Coingecko

Compiled by: Felix, PANews

Sometime around 2140, there will be no more new Bitcoin issuances in the market. All 21 million Bitcoins will be distributed, which means that Bitcoin miners will only be rewarded in the form of transaction fees. Critics argue that transaction fees alone are not enough to maintain the security of the Bitcoin network.

Key takeaways

• After 2140, block subsidies will cease to exist. Bitcoin miners are essential for processing transactions and securing the network, where they will only be paid through transaction fees paid by users.
• The gradual reduction in mining fees calls into question the long-term security of Bitcoin, as mining fees act as a "security budget" for the Bitcoin network.
• A reduction in security budgets could put the Bitcoin network at risk of a 51% attack and/or lead to a more centralized network.
• Bulls believe that the rise in the value of Bitcoin assets and the increase in demand for blocks in the future will make a market that only charges transaction fees economically viable for Bitcoin miners.

Bitcoin's most famous characteristic is its scarcity, which has earned it the title of "digital gold." To ensure scarcity, the rewards paid to Bitcoin miners are gradually reduced every four years through the "Bitcoin halving." But this mechanism poses a long-term challenge.

The Bitcoin network's main incentive for miners – the reward for newly generated Bitcoins, the so-called block subsidy, will disappear completely by about 2140 through the aforementioned Bitcoin halving mechanism. Block subsidies essentially act as Bitcoin's security budget, paid to miners to ensure the security of the Bitcoin network. This begs the question:

Are the remaining transaction fee incentives sufficient to ensure the security of the network?

Understand Bitcoin's incentive model

To understand the challenges of the post-subsidy era, it is necessary to examine the current incentives that secure the Bitcoin network. Every ten minutes, a miner validates a new block of transactions and receives a block reward, which consists of two parts.

• Block subsidy: This is the predetermined amount of newly generated Bitcoins. When Bitcoin was first launched, the subsidy was 50 Bitcoins per block. It is halved every four years, and this event is known as the "Bitcoin halving". This mechanism, which distributes 21 million Bitcoins over decades, is by far the main source of miners' income.
• Transaction fees: This is a fee that users include in their transactions to incentivize miners to add them to a block. You can think of it as an additional "tip" paid to Bitcoin miners to help users who want to ensure that transactions go smoothly, creating a competitive market environment. At the time of writing, the average transaction fee for Bitcoin is $1.30 per transaction.

Bitcoin halving: Reduce the issuance rate

Each Bitcoin halving is a cyclical efficiency test for the mining industry, as each halving actually cuts miners' revenue in half. This ensures that only the most efficient miners are profitable, and less efficient miners may shut down, but the potential downside is that this can temporarily lead to a decrease in hashrate across the network.

Bitcoin network computing power is the total computing power used to secure the Bitcoin network, and when Bitcoin miners shut down, the computing power decreases. The reduced network hashrate means that the Bitcoin network is more vulnerable to cyberattacks such as 51% attacks (i.e., a single entity controls enough hashrate to disrupt the blockchain).

Table 1: Predictable decay of Bitcoin block subsidies over time

Bitcoin block rewards in 2025

To further illustrate the importance of Bitcoin block subsidies for miners, here's a breakdown of the rewards for successfully mining a Bitcoin block.

According to the blockchain's transaction fee data, in July 2025, each new Bitcoin block contains a transaction fee of approximately 0.025 Bitcoins. As of April 2024, the block subsidy is 3.125 Bitcoins.

In summary, Bitcoin miners mine a block's "salary":

• Guaranteed reward (newly generated Bitcoins): 3.125 Bitcoins
• Additional "tip" (from transaction fees): about 0.025 BTC

Total yield per block: Approximately 3.15 BTC.

The "tip" in transaction fees accounts for a very small percentage of a miner's total revenue, meaning that miners will almost certainly not be profitable in a market that relies solely on transaction fees.

Discussion of the economic viability of Bitcoin in the post-subsidy era

Bitcoin transaction fees alone are not enough to secure the Bitcoin network in the current market. However, bulls believe that demand will drive trading fees to much higher than current levels by 2140, while bears foresee a crisis. The main arguments for each point of view will be explored below.

Table 2: Summary of the arguments of the parties

Pessimistic thesis: safety budget reduction

The basis for the pessimism is simple: historical trends in transaction fees do not show a sufficient increase to compensate for the reduction in subsidies. Critics worry that each halving cuts security budgets, making the network less secure.

Optimism thesis: Strong fee market

Optimists believe that Bitcoin will be supported by its rising asset value and growing block demand. First, with the help of Bitcoin's deflationary design, the network will grow into a trillion-dollar asset class, so even a small percentage of Bitcoin fees will generate significant revenue for miners in the future.

Second, there will be a fundamental increase in demand for block space itself, which could take the form of large institutional settlements, Layer 2 rollups, or some new innovation that has not yet been discovered. Ultimately, these factors can drive up transaction fees, making them economically viable in the future.

Potential risks of reduced security budgets

This decline in security budgets could lead to significant Bitcoin miner shutdowns, reducing the total hashrate of the Bitcoin network, which triggers a range of potential risks that put pressure on the network's integrity.

51% attack

The most closely watched threat is the 51% attack, where an entity controlling more than half of the network's hashrate is able to reverse transactions (double-spend) or censor the network. The security budget is a major line of defense; The higher the budget, the more computing power is supported, and the more expensive the attack becomes. Today, the cost of launching such an attack is prohibitively high for rational economic actors, as it is likely to cause the price of Bitcoin to plummet, reducing the value of the attacker's own hardware. However, for geopolitical reasons, actors at the national level may be willing to bear such losses to disrupt the network. As security budgets decline and attack costs decrease, the likelihood of this threat increases in the long run.

Hashrate fluctuations

A more immediate risk is miner capitulation, where the Bitcoin halving leads to a decline in earnings, forcing a large number of miners to shut down their machines, resulting in a sharp drop in hashrate. Although the difficulty adjustment will correct this, the rapid exit of miners may create a fragile window in the short term.

Bitcoin innovation as a solution

The Bitcoin community is actively developing solutions to promote network adoption and mitigate the risks posed by the gradual reduction of Bitcoin's security budget. Here are some of these solutions.

Layer2 solutions

One solution to the limited capacity on the Bitcoin chain is the L2 blockchain. L2s are sub-blockchains built inside the main blockchain (in this case, Bitcoin) to transfer transactions from the main blockchain to these L2s to increase transaction speed and reduce costs.

L2 solutions like the Lightning Network enable Bitcoin to be used for everyday transactions, which has already seen some adoption in Vietnam. Bitcoin Saigon, a Bitcoin community in Vietnam, often collaborates with local merchants, cafes, and marketplaces to promote and support the use of Bitcoin payments powered by the Lightning Network. If successful, the L2 solution will propel the Bitcoin network from professional applications to everyday applications, thereby increasing transaction fees on Bitcoin's main blockchain network.

Bitcoin Runes (Runes).

Runes, which are trending in 2024, are a token standard that leverages Bitcoin's UTXO model, where the balance in a wallet consists of individual blocks of unspent Bitcoin, just like coins and banknotes in a wallet, and OP_RETURN opcodes, a feature that allows small amounts of data to be embedded in Bitcoin transactions, similar to a memo field on a check. Runes make it possible to create meme coins and community tokens on the Bitcoin blockchain. At its peak, Runes pushed Bitcoin's average transaction fee to an all-time high of $127 per transaction. While market interest in Runes has faded, this innovation showcases new use cases have the potential to drive up Bitcoin transaction fees, paving the way for a future Bitcoin economy supported solely by fees.

The user experience of the future

For the average user, interacting with Bitcoin can be a multi-layered experience. Sending transactions directly on the first layer is expected to become expensive and is only used for large transfers. For everyday transactions, users will almost certainly interact with Bitcoin through L2 solutions like the Lightning Network, which provide an instant and low-cost experience, or use Wrapped Bitcoin. This shift means that the user experience for micropayments will still be feasible, but at a different technical level than the main blockchain.

Long-term outlook for investors

For investors, the end of block subsidies sparks a critical conflict between Bitcoin's two core attributes—scarcity and security. Investors are attracted to Bitcoin's fixed supply, but they must now face the reality that the security of the network is dynamic and will depend on future fee markets. If the network underpinning scarce assets is perceived to have vulnerabilities, its long-term value is questionable. Ultimately, Bitcoin's value stems not only from its technical characteristics but also from the market's collective confidence in its ability to remain secure.

conclusion

The day the last new Bitcoin is mined does not mean the end of Bitcoin, but the beginning of its ultimate test. The end of block subsidies is the expected end state of the protocol, and the ecosystem has more than a century to adapt to this challenge. Bitcoin's long-term security will be determined by a complex interplay of forces: technological innovations in L2 solutions, the economic evolution of fee markets, and the social consensus surrounding Bitcoin as a global settlement layer.

Note that this article discusses concerns about Bitcoin's possible distant future, and its content is highly speculative given the century-long gap between now and 2140.

Related Reading: One Year After Bitcoin Halving: Why Does This Cycle Look Very Different?