What the research says about the halving

The awards provide an incentive designed to support the early stage of the development of the system. As mining profits fall, it is expected that they will be replaced by transaction fees paid by users of the system (Nakamoto, 2008)

As mining profits fall, it is expected that they will be replaced by transaction fees paid by users of the system

Translation of the highlighted sentence. The excerpt above is the paper's own English.

ECB-hosted, not ECB-authored: the ECB hosted the 2015 retail-payments conference; it did not write or endorse the paper. The sentence reports the design expectation, which the authors attribute to Nakamoto (2008) — a premise, not a finding.

There has been an implicit belief that whether miners are paid by block rewards or transaction fees does not affect the security of the block chain. We show that this is not the case.

whether miners are paid by block rewards or transaction fees does not affect the security of the block chain. We show that this is not the case.

Translation of the highlighted sentence. The excerpt above is the paper's own English.

A model of the fees-only regime the subsidy schedule ends in — not a measurement of today's network. This sentence is quoted from the ACM Digital Library abstract page (archived copy), because the PDF merges the letters of one word.

Together, these two equations imply that (3) the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive!

the recurring, “flow”, payments to miners for running the blockchain must be large relative to the one-off, “stock”, benefits of attacking it. This is very expensive!

Translation of the highlighted sentence. The excerpt above is the paper's own English.

NBER working paper 2018; published QJE 2025 (retitled, paywalled, not quoted). Budish names a constraint — the intrinsic cost of proof-of-work security. He does not endorse any fix, and nothing on this page suggests he does.

Our analysis confirms Carlsten et al.'s postulate; indeed, we show that gaps form well before fees are the only incentive, and analyze the implications on security.

Our analysis confirms Carlsten et al.'s postulate; indeed, we show that gaps form well before fees are the only incentive

Translation of the highlighted sentence. The excerpt above is the paper's own English.

Quoted from the arXiv abstract page (the authors' version); published at ACM CCS '18, whose copy could not be fetched. “Gaps” are periods when miners stop mining because fees do not cover costs. A model result, not an observation of today's network.

Second, the transaction market cannot generate an adequate level of "mining" income via fees as users free-ride on the fees of other transactions in a block and in the subsequent blockchain.

the transaction market cannot generate an adequate level of "mining" income via fees as users free-ride on the fees of other transactions in a block

Translation of the highlighted sentence. The excerpt above is the paper's own English.

A BIS working paper: the author's views, not the BIS's. Quoted from the BIS abstract page. Auer's own remedy is to depart from proof-of-work — it is quoted in full below, so the paper is not read as backing any proof-of-work fix.

We find that it is optimal to use seignorage rather than transaction fees to finance costly mining.

it is optimal to use seignorage rather than transaction fees to finance costly mining

Translation of the highlighted sentence. The excerpt above is the paper's own English.

Their model favours seigniorage: it finds it optimal to pay for mining with new issuance rather than fees (“seignorage” is the paper's spelling). A normative model result — the case for issuance that never ends — not a finding that fees will fail. Bitcoin's schedule takes issuance to zero; that is a fact about the schedule, not about the paper.

We demonstrate that a majority attacker can successfully attack with a negative cost, which shows that the protocol mechanisms are insufficient to create a secure network, and emphasizes the importance of socially driven mechanisms external to the protocol.

a majority attacker can successfully attack with a negative cost, which shows that the protocol mechanisms are insufficient to create a secure network, and emphasizes the importance of socially driven mechanisms external to the protocol

Translation of the highlighted sentence. The excerpt above is the paper's own English.

Cuts both ways. If an attack can cost less than nothing, the size of the security budget alone does not decide security — which weakens “the budget is too small” as much as “the budget is enough”. NBER working paper, not peer-reviewed.