The asset manager argues Bitcoin's fixed supply schedule does not undermine network security, even as miners face shrinking block rewards after each halving.
Fidelity Digital Assets has pushed back against concerns that Bitcoin’s long-term security will deteriorate as mining rewards decline, arguing in a new research report that the network’s economic incentives remain sufficient to secure the blockchain over time.
The report, authored by Fidelity research analyst Daniel Gray, reiterated the view that Bitcoin’s security depends on more than block rewards. Transaction fees, market incentives and other economic forces continue to encourage miners to secure the network and make sustained attacks prohibitively expensive, it said.
The findings challenge a longstanding criticism that each quadrennial halving weakens Bitcoin’s security by reducing the issuance of new coins. Critics argue that declining block rewards could eventually erode miners’ incentives unless transaction fees grow enough to offset the shortfall.
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