Bitcoin’s Security Budget Problem is Solved Bitcoin’s “security budget” is often framed by altcoiners as a looming shortfall as block subsidies halve. That framing mixes two different things. The rules of Bitcoin (eg 21 million cap, validity of transactions, block weight limits) are secured by full nodes and private keys. Miners don’t set or change those rules; they only propose blocks that fit within them. What mining buys is settlement finality: how costly it is to censor or reorder recent blocks. The question, then, is whether the network can reliably make reorgs and censorship uneconomic as the subsidy shrinks. Contrary to what Ethereum influencers claim, Bitcoin’s budget for finality is NOT a fixed paycheck; it’s a market price that rises when needed. When marginal miners can’t cover electricity costs after a halving, they shut off, blocks slow temporarily, and the difficulty adjusts every 2,016 blocks to restore ~10‑minute blocks for the miners who remain. When confirmations become scarce or unreliable, whether from congestion or attack, the fee rate (sats per vbyte) climbs as users compete for the next block. That converts scarcity directly into miner revenue. At 1,000 sats/vB across ~1,000,000 vB, a single block’s fees are about 10 BTC—often more than the subsidy. We’ve seen this play out: fee blow‑offs in 2017 and 2021, and in May 2023 multiple blocks where fees alone exceeded the subsidy. In practice, miners respond by filling blocks to capture those fees, not by leaving money on the table. Users have levers that steer revenue to the honest tip. With Replace‑By‑Fee (RBF) and Child‑Pays‑for‑Parent (CPFP), they can rebroadcast transactions with higher fees or attach a high‑fee child to an unconfirmed parent, instantly elevating inclusion priority. That concentrates rewards on blocks that confirm parents and makes omitted transactions a bounty for whichever miner defects from any censoring or undercutting strategy. Mining pool competition operationalizes the effect: when fees are rich and visible, each pool has a dominant incentive to defect first and claim them now, collapsing any cartel that tries to suppress or sequence transactions for nefarious purposes. If attacks persist, receivers can raise confirmation thresholds for high‑value transfers, stretching an attacker’s required time and energy while urgent senders bid up fees to start that clock immediately. These logical user‑side controls ensure that any sustained attack must burn growing resources against rising rewards for the honest chain. The solution to the security budget problem is clear: nodes lock the rules; difficulty adjustments re‑equilibrate participation; the fee market prices scarce blockspace on demand; RBF/CPFP and mining pool competition route revenue to the parent‑confirming chain; and confirmation policy dials assurance as high as needed. Empirically, Bitcoin has already demonstrated this behavior: fee spikes during stress, miners maximizing fee inclusion, and rapid reversion to normal once backlogs clear. As subsidy declines, fees don’t have to be permanently high; they need to be responsive when finality is under threat. That responsiveness is exactly what we observe. The “security budget problem” isn’t a gap to be filled with permanent tail inflation, it’s a market process that scales up the cost of attacks precisely when it matters.