Vitalik Buterin is concerned about Bitcoin’s future.
In a September 2 interview with economics writer Noah Smith, the Ethereum creator said that he is “worried [about Bitcoin] for two reasons.” He explained that he thinks Bitcoin could face problems in the long-term future owing to its fee model. Bitcoin currently distributes coins to miners as payment for securing the network, but as the protocol has a hard supply cap of 21 million, eventually the network will rely on transaction fees alone for security. Buterin told Smith that this is a problem because Bitcoin is “not succeeding at getting the level of fee revenue required to secure what could be a multi-trillion-dollar system.” The amount of fees Bitcoin generates to other protocols has long been a hot topic of discussion in the crypto community. According to Crypto Fees data, Bitcoin averaged about $225,000 in fees over the past week, trailing DeFi mainstays like Aave and Uniswap. The biggest fee generator is the protocol Buterin created, which took in around $2.7 million over the same timeframe.
Buterin said that he also has fears for Bitcoin because “Proof-of-Work provides much less security per dollar spent on transaction fees than Proof-of-Stake,” arguing that it would be problematic to have a $5 trillion network that costs only $5 billion to attack. Buterin also pointed out that Bitcoin switching away from Proof-of-Work would be “politically infeasible.”
Buterin’s comments will likely spark outrage in some corners of the crypto community. Bitcoin’s most ardent supporters have long argued that Proof-of-Work is a fundamental part of the network’s design. Others have made similar remarks to Buterin regarding the top crypto’s fee model, though as Bitcoin is scheduled to emit coins until around 2140, that issue is typically overlooked by its supporters.