Bitcoin has another security budget problem not related to halving

Anyone who is interested in the tech discussion should be familiar with the bitcoin security budget debate. One side says bitcoin mining reward going to zero, how is it going to pay miners? The other side says fee will go up. The other side respond fee is not stable...

However, bitcoin actually has another security budget problem since day 1, not related to halving.

The total reward is the same no matter how many miners are mining. Miners can choose a trusted person to mine, and share the reward based on an agreed upon rule. They get the same reward as before, without spending a penny on power or mining rigs.

Miners choosing a trusted party to hold and distribute reward is already happening. It is called mining pools.

There doesn't need to be a way for it to happen today. If everyone makes more money that way, then the Nash equilibrium is there, not the current state. The model is broken.

I will still give you an example how this could realistically happen:

1. Top pools that controls 99% of the hashrate decide to join the reward sharing program.
2. They tell miners to stop mining, they will still get 90% of the reward, without spending power.
3. The pools start mining with only 10% of the original hashrate.
4. Now they controls 90.8% of the hashrate instead of 99% (originally 99 to 1, now 9.9 to 1), so an 8% decrease in profit. However, they now consume 90% less electricity, 90% less rigs.
5. An 8% decrease in profit with a 90% reduction in cost results in net positive. Everyone gets more money.

The reward sharing rule could be based on how much money each miner deposit in. This is no difference than spending money on mining rigs to get more shares.

It is not a hack or a direct attack. They can even advertise it as "bitcoin go green".

The cost to attack bitcoin will become almost zero. The worst part is, if miners are 100% cooperative with each other. The lower the hashrate goes, the higher reward each miner gets. The Nash equilibrium state is at near zero hashrate.

Some people may say, if they do this, bitcoin will fail and they lose all the money. If you use this as an argument, no coin can ever be attacked. That is not how we examine security models.