Bitcoin’s miner reward model raises concerns, says economist By Investing.com
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George Mason University economics professor Lawrence White expressed concerns about the changing miner reward model for during a discussion with David Lin published on Sunday. He suggested that as Bitcoin production slows down, miners’ rewards will increasingly depend on transaction fees, potentially leading to security risks caused by insufficient incentives.
At present, miners are primarily incentivized by the generation of new Bitcoins. However, in a future scenario where Bitcoin production ceases, the rewards would solely consist of these transaction fees. This shift could pose significant challenges to the security of Bitcoin transactions, according to White.
Despite these potential risks, White underscored Bitcoin’s robust security history. He emphasized that the cryptocurrency has proven to be hack-proof so far.
While expressing skepticism about Bitcoin’s role as a future currency, White indicated that other cryptocurrencies might be better positioned to fulfill this role.
At the time of their conversation on Sunday, Bitcoin was trading at $29,906.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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© Reuters
George Mason University economics professor Lawrence White expressed concerns about the changing miner reward model for during a discussion with David Lin published on Sunday. He suggested that as Bitcoin production slows down, miners’ rewards will increasingly depend on transaction fees, potentially leading to security risks caused by insufficient incentives.
At present, miners are primarily incentivized by the generation of new Bitcoins. However, in a future scenario where Bitcoin production ceases, the rewards would solely consist of these transaction fees. This shift could pose significant challenges to the security of Bitcoin transactions, according to White.
Despite these potential risks, White underscored Bitcoin’s robust security history. He emphasized that the cryptocurrency has proven to be hack-proof so far.
While expressing skepticism about Bitcoin’s role as a future currency, White indicated that other cryptocurrencies might be better positioned to fulfill this role.
At the time of their conversation on Sunday, Bitcoin was trading at $29,906.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
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