What Will Bitcoin Look Like After Mining Subsidies End?

One of the most fascinating long-term questions regarding Bitcoin that I rarely hear anyone discuss is this: what happens when the block subsidy completely hits zero? Right now, miners have two income sources: . Block Subsidy (new BTC created every block) . Transaction Fees But we know the block subsidy keeps getting cut in half every four years and will vanish entirely by 2140. After that, miners will be relying solely on transaction fees. So, this leads me to wonder: how will Bitcoin really function in that future? 1. A Fee-Driven Security Model. Currently, miners still rake in a decent amount from block rewards. Sure, fees matter, but they're not the primary income source just yet. In this post-subsidy world: - All of miners' earnings would come from transaction fees. - Network security would entirely depend on the demand for block space. - A free market will determine what users are actually willing to pay for security. Bitcoin won’t be backed by inflation anymore but rather by actual usage and demand. 2. Bitcoin Could Evolve into a Settlement Network. In the future, Bitcoin might function more as a secure global settlement network. It’s likely that small daily transactions will occur primarily on Layer 2 solutions like the Lightning Network. The base layer (on-chain Bitcoin) may be mainly for: . Large-value transfers . Institutional settlements . Opening and closing Lightning channels . Final settlements

There is a similar topic I came across that resembles this one: https://bitcointalk.org/index.php?topic=5574940.msg66422758#msg66422758 Judging from what most experienced users have said, I think this is really a concerning issue. Although I wish this was implemented instead of halving:

Don't know where to start, because until now the community doesn't have 100% solution about the era after block rewards no longer exist (as far as I know). Many support the native network being used as a settlement with the caveat that each block to be confirmed will incur a high fee, because that's the only reasonable solution so far. Looking at the BTC adoption data above, we can conclude that adoption is increasing year by year. Layer 2 is a solution & ultimately, transaction finality is carried out on the native network with high fees. I think this is acceptable to all parties.

Competition among Bitcoin miners change with time, and with more mining hashrate, the competitiveness becomes harder with time especially in any new market cycle and bull market that attract considerable new mining companies and miners to join. I disagree with you that Bitcoin miners are different and there are always inefficient Bitcoin miners with bad finance since their starts, to bad risk management so that they will have to capitulate from Bitcoin mining industry. It has happened in many Bitcoin market cycles and bear markets without disappearance of Bitcoin block subsidy. You're wrong to say that will happen only when the Bitcoin total supply all already mined and existed for circulation and there will be only Bitcoin transaction fees for miners with each new found block.

I believe you are misinterpreting me here. I never stated that an "inefficient" miners will only exists after the subsidy disappears. It is also well established that mining capitulation has occurred during several cycles even when the block reward for mining still exists,  therefore, I am not debating on that with you. Rather,  I am making a point about structural stress and not historical existence.  The point I made is simply that when miners rely 100% on transaction fees as their source of income, it could create a different economic landscape than the way it exists today. Presently now, the block reward currently provides a stable base income for miners with each block mined,  but however, in a totally fee driven mining environment,  miner revenue will depend entirely upon network use,  and demand for the fees. Therefore,  I am not arguing about whether or not an  "inefficient" miner exists;  rather,  I am discussing the evolution of mining economics should all mining eventually become fee based.