Bitcoin, the world’s biggest cryptocurrency in terms of market capitalization, Because of its unsustainable development trajectory, is dependent to a serious security concern.
According to a recent analysis by Justin Bons, the founder of Cyber Capital, to retain its present degree of security, BTC’s value must double every four years or face severe fees.
In Bons’ study, Bitcoin’s security system is built on its mining network, which requires a steady influx of new miners to ensure its security. However, assume the price of Bitcoin continues to climb at its present rate.
1/9) BTC has to double in value every four years for the next century or sustain extremely high fees
Just to maintain the current level of security
Such growth is impossible since it would exceed global GDP in 31 years based on current price
Therefore; BTC security is doomed!
— Justin Bons (@Justin_Bons) April 23, 2023
In such instances, the cost of mining will ultimately become too expensive, resulting in a fall in the number of miners and, as a result, a loss in security. Bitcoin’s security hinges on price, which may become unsustainable if the current climb persists.
Bons noted BTC must innovate security or risk success causing downfall. Furthermore, Bons accuses Bitcoin of having “security and technological foundations made out of the sand” and alleges that the cryptocurrency’s development strategy relies on “false hope.”
He claims that paying hundreds of dollars for a single transaction is impractical in a competitive market. When costs rise, users depart, reducing the network’s overall security.
Bons blames the problem on the unneeded inclusion of the block size restriction. The limit on Bitcoin’s block size has led to a volatile and insecure free market, according to his claims.
Bons stated that there are only two options: either allow censorship and double-spending to occur when the network experiences a 51% attack or increase BTC supply inflation beyond the limit of 21 million.
Bons believes the latter is the better choice. However, both are likely as the network forks. Some experts disagree with Bons’ analysis.
They believe that Bitcoin’s security can still be maintained even if its growth rate decreases. They suggest that technologies like the Lightning Network can help reduce transaction costs and ensure security.
The Role Of The Lightning Network in Bitcoin Future
The Lightning Network is a Bitcoin blockchain-based second-layer payment technology. The creators designed it to address some of Bitcoin’s scaling difficulties.
These difficulties include the lengthy transaction processing times and hefty fees associated with on-chain transactions. The Lightning Network establishes a network of payment channels between two parties, allowing them to conduct off-chain transactions with one another.
Smart contracts protect payment channels. They allow many microtransactions between the parties without broadcasting each transaction to the Bitcoin network.
The Lightning Network is not a perfect answer to Bitcoin’s scaling concerns. However, it is a huge step forward in enhancing the Bitcoin network’s efficiency and usability. They anticipate that it will play a growing role in developing Bitcoin and other cryptocurrencies.
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In summary, Bitcoin’s development trajectory seriously threatens its security. According to Bons, BTC must find a new method to preserve its security or risk becoming a victim of its success.
The Lightning Network is a huge step in increasing the Bitcoin network’s efficiency and usability. They believe it will be increasingly important in developing Bitcoin and other cryptocurrencies.