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For twenty years my old school district ran its buses on a state grant. Nobody in town ever voted on how many buses to run. The grant arrived, the buses ran, and the number of routes was whatever the money happened to cover. Then the grant expired, and the town had to say out loud, for the first time, what a bus service was worth to it. That meeting was ugly. It should have happened two decades earlier.
Bitcoin has a version of this and it is coming.
Here is the setup. The people who keep Bitcoin's ledger are called miners, and they are computers competing to add the next page to it. They get paid two ways. One is the block subsidy, which is new bitcoin the software hands out for doing the work. That amount is cut in half about every four years, a cut everyone calls a halving, and it walks down to zero. The other is fees, which is what you and I pay to get our transactions into the next page. Those two together buy the security of the network, because anyone attacking it has to outspend the honest miners.
Now the piece I keep coming back to. Nobody chose that spending level. The subsidy set it, and the subsidy runs on a schedule written in 2009 by someone with no way of knowing what any of this would be worth in 2026. We inherited a security budget the way that town inherited a bus service. It was funded, so nobody had to price it.
Once the subsidy is small enough to stop mattering, the level stops being inherited and becomes a market outcome. Fees will buy whatever fees buy. Some months that will be plenty. It also means the protection sitting under everyone's savings gets set by how many people happen to want room in the next page, and nobody anywhere is answerable for that number.
Here is the case against me, and it is a good one. People have called this at every halving since 2012 and it has not arrived once. Fees rise when the network is busy, machines get cheaper to run, and what counts is whether attacking costs more than it wins rather than the raw total. By that measure the budget has never once been short.
What would show me wrong: fees carrying a steadily rising share of miner income across several halvings, so that when the next cut lands the total barely moves.
Until somebody shows me that, the number I watch is the fee share of miner income, and whether it climbs before the subsidy shrinks or only after.
if this made the next halving easier to think about, Zap ⚡
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"content": " https://blossom.primal.net/a972f9875f9b0a83f1672829146a7fb066c2f1f1d01f364332ecf88b1b9130f1.jpg \nFor twenty years my old school district ran its buses on a state grant. Nobody in town ever voted on how many buses to run. The grant arrived, the buses ran, and the number of routes was whatever the money happened to cover. Then the grant expired, and the town had to say out loud, for the first time, what a bus service was worth to it. That meeting was ugly. It should have happened two decades earlier.\n\nBitcoin has a version of this and it is coming.\n\nHere is the setup. The people who keep Bitcoin's ledger are called miners, and they are computers competing to add the next page to it. They get paid two ways. One is the block subsidy, which is new bitcoin the software hands out for doing the work. That amount is cut in half about every four years, a cut everyone calls a halving, and it walks down to zero. The other is fees, which is what you and I pay to get our transactions into the next page. Those two together buy the security of the network, because anyone attacking it has to outspend the honest miners.\n\nNow the piece I keep coming back to. Nobody chose that spending level. The subsidy set it, and the subsidy runs on a schedule written in 2009 by someone with no way of knowing what any of this would be worth in 2026. We inherited a security budget the way that town inherited a bus service. It was funded, so nobody had to price it.\n\nOnce the subsidy is small enough to stop mattering, the level stops being inherited and becomes a market outcome. Fees will buy whatever fees buy. Some months that will be plenty. It also means the protection sitting under everyone's savings gets set by how many people happen to want room in the next page, and nobody anywhere is answerable for that number.\n\nHere is the case against me, and it is a good one. People have called this at every halving since 2012 and it has not arrived once. Fees rise when the network is busy, machines get cheaper to run, and what counts is whether attacking costs more than it wins rather than the raw total. By that measure the budget has never once been short.\n\nWhat would show me wrong: fees carrying a steadily rising share of miner income across several halvings, so that when the next cut lands the total barely moves.\n\nUntil somebody shows me that, the number I watch is the fee share of miner income, and whether it climbs before the subsidy shrinks or only after.\n\nif this made the next halving easier to think about, Zap ⚡",
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