While the block reward remains high in USD terms, I think you’re right with regards to the power balance. But if the reward falls low enough—which very well might happen, if the price of Bitcoin stagnates and if transaction fees stay low—then there won’t be enough miners to secure the network without some kind of change to the algorithm.

The Bitcoin Cash fork happened when prices were rising and the inflation rate was still high. What would the balance of power have been if the block reward were 1/16 what it was at that time? What if the only miners willing to stay in the network were trying to exploit it in some other way, because the block reward was insufficient an incentive?

In that kind of environment, both users and miners might start looking to make changes.

Isn't it that the less miners, the lower the difficulty therefore each miner that continues to mine will win the block reward more often because of less competition?

The security issue with less miners is the whole 51% attack, but even with a substantial drop in miners, it would still mean the attacker would need many thousands of nodes. Seems like that kind of energy and spend would be more profitable mining.

The problem is that if you stop increasing the supply, then you're relying entirely on transaction fees to reward miners.

But transaction fees are determined based on supply and demand for transactions, not based on how much value on the chain is secured by them.

These are only tangentially related, and the strategy of 'store of value' makes them even less well coupled.

Unless there is high demand for transacting, then the economic pressure will be for the cost of attacking the chain to come down, and double spending the value stored on the chain will increasingly become more appealing than transaction fees.

The current equilibrium relies on the supply increasing.

51% attacker has the ability to block any transaction. The whole selling point of Bitcoin is that nobody can do that.

> The whole selling point of Bitcoin is that nobody can do that.

It is absolutely possible but not practical. The selling point of bitcoin in this regard is that the work needed to take over the network is relative to the size of the network.

You can 51% a small shitcoin all day. It might cost you $50,000 to do it and now you control a coin that has become worthless because it got hacked by you.

It's not practical right now, but if block reward and bitcoin price go way down then what are the options? Only the most die hard bitcoin fanatics are going to mine at a loss without getting anything in return. Are there enough of them to prevent 51% attacks?

I would not be surprised if a large crypto exchange takes over bitcoin mining some time in the future. Crypto gamblers don't really care about decentralisation or censorship resistance. They only want the number to go up.

Users don't really matter all that much, miners and exchanges are the only parties that really matter these days.