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Avalanche founder Emin Gün Sirer has warned that Bitcoin could face a long-term “crisis” driven by flaws in its economic design. Sirer argues that the network’s mining rewards are not sufficient to sustain the security model over time, making this risk more significant than concerns about quantum computing or competition from other tokens.
Sirer’s concern centers on how Bitcoin compensates Proof-of-Work (PoW) miners. Bitcoin is secured by PoW miners who use large amounts of electricity and computational power to validate blocks and protect the network. In return, miners receive block rewards and transaction fees.
However, Sirer points to a structural decline: Bitcoin’s block rewards shrink significantly with each halving event. As rewards fall, critics argue that transaction fees may not be enough to cover the energy and hardware costs required to keep miners operating.
According to the account, the debate is that Bitcoin’s “security budget” may need to be funded almost entirely by transaction fees. If fees do not rise enough, miners could be forced to run at a loss, unless transaction fees become extremely high.
The warning comes amid social media discussion that has been described as hype-driven. On Saturday, Kalshi Crypto, a crypto-focused account associated with the betting platform Kalshi, posted a headline claiming that Binance founder Changpeng Zhao (CZ) predicted Bitcoin would eventually be replaced.
That headline was later framed as being taken out of context. In a May 9 interview with Ran Neuner on Crypto Banter, CZ said there was only a theoretical possibility that Bitcoin could be replaced in the future by some superior technology. He also acknowledged that BTC is currently “global money.”
Sirer said he is proposing a solution using technology he helped create. He suggested that Bitcoin could theoretically offload some of the heavy lifting of transaction validation with a pre-consensus layer.
The proposal, the article notes, is unlikely to be welcomed by conservative members of the Bitcoin community.
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