The most common FUD topic about Bitcoin these days is about the fee market, or possible lack of. Critics claim that at some point in the future, without a block subsidy, there will be no mining incentive and double spends will be rampant, leading to the collapse of Bitcoin.

HODL culture taken to the extreme, where every coin is in long term storage and there are zero available on the free market would theoretically lead to the collapse of mining revenue. HODL’ers don’t pay anything to maintain the network, and if Bitcoins are never transferred then perhaps more inflation would need to be forked in, as inflation is of course a tax on savers. In interest of long term network health, it’s important to spend coins and use block space.

Fees are not that low now, however. Bitcoin miners make around $500k daily in fees (https://cryptofees.info/). This is around 20x lower than Ethereum (the highest), but generally people pay less for simple transactions than they do for gambling/trading/other forms of entertainment. But $500k is about 2-3 blocks of the current block reward, so if that was the daily miner revenue then hashrate would be dramatically lower.

Currently Bitcoin network limits do not allow fees lower than 1 sat/byte to be propagated. If the price of Bitcoin continues to increase, and this limit doesn’t change, then it’s possible that even half full blocks at the lowest fee rate will be substantial in dollar terms.

It’s undeniable that the block subsidy increases security of the Bitcoin chain. Is it reasonable to worry about what will happen when it’s reduced? Will a fee market develop that can pay these high amounts? Or can Bitcoin survive with much lower relative hashrate than there is currently?