Bitcoin Security Budget Myth: Fee Market & Miner Incentives

Pierre Rochard of Riot Platforms and The Bitcoin Bond Company challenges claims of a looming Bitcoin security budget crisis. He argues critics confuse the fixed protocol rules with the economics of settlement finality. As block subsidies halve, the fee market dynamically adjusts: miners compete for rising transaction fees and difficulty retargets maintain network participation. Replace-By-Fee and Child-Pays-For-Parent tools enable users to rebroadcast transactions with higher fees, creating visible bounties that deter censorship and reorg attacks. Historical fee spikes in 2017, 2021 and May 2023 illustrate how transaction fees can exceed block rewards, incentivizing miners to secure blocks. Rochard contends that no “bribe oracle” is needed: a public fee bounty outcompetes private off-chain promises. He notes that miners can quickly defect from any censoring cartel to capture fees, and exchanges and receivers can raise confirmation requirements to increase attack costs. This fee-driven, incentive-based mechanism shows that the Bitcoin security budget self-adjusts when under threat, debunking the idea of a permanent shortfall.