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, makes the case that Bitcoin’s security rests on far more than its block subsidy.
Why halvings don’t break security
The findings challenge a longstanding criticism that each quadrennial halving weakens Bitcoin by reducing the issuance of new coins.
Since April 20, 2024, miners have received 3.125 BTC per block, down from 6.25 BTC in the previous cycle.
Gray argued that lower issuance has not translated into weaker incentives because Bitcoin’s rising price has more than offset the decline.
He pointed to growth in average daily miner revenue, which rose from roughly $26,300 during the first halving cycle to more than $40.2 million today.
Gray wrote:
“Despite declining issuance, miner incentives — and by extension, network security — historically strengthened alongside Bitcoin’s price.”
The 51% attack stays limited
The report examined attack vectors directly rather than relying on adoption assumptions.
Gray noted that even a majority of hash rate does not grant control over Bitcoin’s ruleset:
“These attacks do not give central authority over Bitcoin’s ruleset. Therefore, 51% attacks remain limited in scope.”
For a censorship attack to succeed, an attacker would need to maintain upwards of 99% of hash rate. Gray explained how the market itself fights back:
“Higher transaction fees would likely act to incentivize additional honest participation, pulling more hash rate online to compete directly with the attacker.”
Miners face near-term pressure
While Fidelity argues the long-term incentive structure remains intact, many publicly traded miners face financial strain, with some analysts describing the current environment as one of the most challenging on record.
Several miners have diversified into artificial intelligence and high-performance computing. A VanEck report estimated public miners could require up to $50 billion to fully transition to AI infrastructure.
Blocksbridge Consulting noted:
“AI and HPC facilities require higher standards for uptime, cooling, electrical redundancy, networking and customer support.”