Bitcoin's Security Budget Issue: Problems, Solutions and Myths Debunked

So the two questions that I cannot see answered there.

How much does the security budget need to be?

When is it projected to drop below that?

The closest they come to addressing that seems to be a quote saying "We might have only two halvings left before this becomes a serious issue."

So 8 years-ish?

The original intention was to fund the network entirely off fees eventually. I don't think there was a stated expectation of block size, but it was intended to be made larger at some point.

Before coming up with specific solutions to the cost of securing the network I would think that evaluating what the acceptable range of cost/security should be would be the first starting point.

I feel they also neglect a realistic evaluation of the likelihood of a 51% attack. As soon as someone interferes with the network by 51% attack, everybody knows that it has happened. What countermeasures might be deployed?

While a miner confirming a block is like a rubber stamp from an auditor, there is nothing to stop other people from checking their work. If there are shenanigans they can be spotted, if a genuine 51% attack were to happen people would be highly motivated to counter it. That may involve bringing more compute to the network, or even changing the protocol. Ultimately the network is decided by the consensus of the users. Accepting signed blocks is the consensus. Because of the scale required to do a 51% attack on BitCoin it would almost certainly be detectable who was doing it. Under an attack people would be prepared to swiftly agree to some rule to exclude the attacker, the alternative is just two severe. You could think of it as a fork or you could think of the attackers version as the fork. You could have anything from, 'Today we stop accepting blocks from that pool over there', to 'From now until this mess is resolved, Kate confirms all blocks with her private key, We trust Kate, she's nice' The mitigation could be prosaic or fantastic, it doesn't matter, the thing that people agree upon will be the new chain. A fallback proof of work algorithm that requires more generalised hardware would work well. In case of attack, switch back to GPUs and a lower hash rate on a newer algorithm. ASICs become redundant and the network redistributes to whoever is supplying the GPUs. Then to do a 51% attack the attacker must not only have enough to 51% the ASIC hash rate, but have in reserve more GPUs than the rest of the world can bring to bear at short notice to 51% the fallback method.

it would be great if each tracked event was linked to a section of the project 2025 language. as it stands, to someone unfamiliar, it is just a list of initiatives the trump admin has completed.

Ethereum changes the cost to use the network based on recent block sizes, and allows the block size to go up during high demand. So it's cheaper to use the network when blocks are less full, and more expensive if blocks are mostly full. I'm behind on the current parameters, but they're essentially doing what you ask for:

https://eips.ethereum.org/EIPS/eip-1559

Yes, but there will be far greater total demand for transactions because the costs will no longer be prohibitive to certain types of commerce (which has network effects).

Drivechain is an idiotic proposal to just give total control of the network to miners. Atomic swaps already enable the same thing, except without a wealth transfer to miners.

>How much does the security budget need to be?

I don't know but I expect it to be proportional to market cap, not getting cut in half forever.

>The original intention was to fund the network entirely off fees eventually.

I think this was a half-baked idea from satoshi. My theory is that the bitcoin distribution was chosen to avoid having to decide on any "arbitrary" emission schedule. Bitcoin basically acts an experiment to determine what level of coinbase reward is safe, through bisection.

>if a genuine 51% attack were to happen people would be highly motivated to counter it. That may involve bringing more compute to the network, or even changing the protocol.

Who? Just bitcoin users in general? There is no group that stands to gain, it's sort of a tragedy of the commons situation.

Bitcoin's security is tied to ASIC hardware. You can't just spin up a couple desktops at home to protect the network anymore.

>A fallback proof of work algorithm that requires more generalised hardware would work well.

I think monero already does this. Look up "RandomX" it is amazing to read about. But the problem is that these CPU-mined coins are even easier to attack because you can easily rent hardware or use a botnet to do a 51% attack. Whereas with bitcoin you need to buy a bunch of ASICs which would be devalued by such an attack.

>Ultimately the network is decided by the consensus of the users. Accepting signed blocks is the consensus.

I was going to write a long response to this, but in a nutshell classical consensus and PoS sucks.