Analyst calls Bitcoin’s ‘security budget’ argument a category error

In a recent episode of Bankless’ podcast, guest Michael McGuiness talked about why he decided to sell his Bitcoin in favor of Ethereum.

“I used to be a pretty strong Bitcoiner”

But listening to the original Ultrasound Money episode with @drakefjustin changed his mind:

“I have no idea how Bitcoin is going to solve the declining security budget.”

There’s really 2 options:

- "You add tail issuance where you… pic.twitter.com/mRbTSUBuM3

— Bankless (@Bankless) April 22, 2026

The security budget argument, as it is known, has become one of the most cited reasons for skeptics to doubt Bitcoin's long-term staying power. Pierre Rochard, a Bitcoin researcher and CEO of The Bitcoin Bond Company, joined TheStreet Roundtable and said the argument is built on a category error that conflates two completely different things.

According to him, the block subsidy halvings do not threaten Bitcoin's security because it was never the subsidy keeping the network secure in the first place.

Related: SEC reportedly pauses 24-hour stock trading proposal

What is the security budget argument?

The biggest point of concern is transaction finality. Is it possible to rewrite Bitcoin’s history?

Bitcoin miners are currently rewarded with newly issued Bitcoin every 10 minutes, on average. That issuance gets cut in half every four years, called the halving. This places strain on Bitcoin miners, whose revenue gets cut in half while their operating expenses remain the same.

"The concern is that as the revenue for the Bitcoin miners gets cut in half every four years, isn't that a problem? Because then those Bitcoin miners go out of business and then isn't the network at risk?” Rochard explained.

Skeptics also point out that transaction fees make up less than one percent of miner revenue today, leaving a massive gap as the subsidy shrinks.

Fees, not subsidies, secure the network

Rochard says the framing mixes two different functions. These are new issuance bootstraps the network, while transaction fees pay for finality.

"It's important to separate those two because ultimately what gives Bitcoin transactions finality is the fees. It's not the new issuance of Bitcoin. And so you can cut in half the new issuance of Bitcoin every four years, and that doesn't really have any effect on transaction finality,” he said.

The two roles were separated over time through natural division of labor. Bitcoin miners typically do nothing but generate hash rate, while separate nodes handle transaction verification and finality.

Critics see one percent fee revenue and call it a crisis. Rochard sees a healthy, low-pressure network

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"The reason why transaction fees are not replacing the new issuance of Bitcoin is because there's so little pressure on censorship. There's very little pressure on Bitcoin miners to exclude transactions. And so there's no incentive for transactors to bid up their transaction fees,” he said.

Fees rise when demand for finality rises. It is a market-driven process, not a central planning problem.

A market-driven process

The deepest misconception in the security budget argument is thinking the network needs a pre-set dollar figure for security.

"There's no central planning committee that establishes a budget and says, we want this much hash rate. The price determines the cost. The transaction fees determine how much hash rate there is in the network,” Rochard explained.

In mid-2023, the surge in popularity of BRC-20 tokens and Ordinals pushed miner fee revenue up 15 times, a real-world demonstration of how network activity drives fees higher on its own.

As Bitcoin's role in the global financial system grows, demand for settled, final transactions will grow with it, and fees will follow.