Topic: A world without block rewards - page 2. (Read 1229 times)
It's not a new thing. Some altercoin such 100% pos coins as NXT and qora don't have any block rewards. it works very well.
Also, one has to assume that mining will get more power efficient.. In 100+ years, if we still use the same amount of power per hash we have failed as humanity..
better to solve other problem that are more important for now and more pertinent, by the time that scenario happen many of us will be died, but it is known already that the price will need to accomodate mining activity or the network will deteriorate
also it seems that satoshi didn't care too, if he predicted that the verdict will happen in 20 years, essentially he didn't take into account that scenario
also it seems that satoshi didn't care too, if he predicted that the verdict will happen in 20 years, essentially he didn't take into account that scenario
hello cianuro,
good question for a newbie
yes, that question was asked i guess 10.000 times but anyway:
https://bitcointalksearch.org/topic/what-happens-when-all-bitcoins-are-mined-71176
http://bitcoin.stackexchange.com/questions/5275/what-will-happen-to-mining-after-the-20-999-999th-bitcoin
http://bitcoin.stackexchange.com/questions/11291/what-happens-to-transaction-once-all-the-blocks-are-mined
https://www.youtube.com/watch?v=2cMjR0mB9Sc
good question for a newbie
yes, that question was asked i guess 10.000 times but anyway:
https://bitcointalksearch.org/topic/what-happens-when-all-bitcoins-are-mined-71176
http://bitcoin.stackexchange.com/questions/5275/what-will-happen-to-mining-after-the-20-999-999th-bitcoin
http://bitcoin.stackexchange.com/questions/11291/what-happens-to-transaction-once-all-the-blocks-are-mined
https://www.youtube.com/watch?v=2cMjR0mB9Sc
No, miners don't pay transaction fees. They GET PAID the transaction fees from the transactions in the block they hash/verify.
My point is, when transaction fees are the ONLY incentive to mine (and that will happen eventually as a certainty) the total sum of the transaction fees must match the cost of mining the block they were included in. If the block costs more to mine than the value of the transaction fees in a block, miners (most) will shut down. At least so many will shut down that the network becomes insecure and Bitcoin will die.
Currently, at the existing transaction per block limit, that would mean that a fee of $1.5-$2 would have to be paid for EVERY transaction to be added to the blockchain. Alternatively, the functional or "real" value of BTC should be ten times higher to compete with an average alternative payment processor. That is of course if you look at BTC from a purely transactional and transfer point of view.
So, I'm looking for ideas as to what the ecosystem as a whole will see as a solution to this. Either Bitcoin finds mainstream adoption and the price increases to at least match the cost of mining or the blocksize will have to increase to accommodate more transactions with a lower fee. Perhaps a bit of both.
Either way, if either are to happen, Bitcoin will need to find mainstream adoption before the block reward becomes less than the cost of mining. I think I read that Satoshi said that Bitcoin would be everywhere or nowhere in 20 years and this might be what he meant. 20 years is 5 halvings of the reward. We're almost 2/5s of the way there.
Of course, I may be way off here, this is all hypothetical
My point is, when transaction fees are the ONLY incentive to mine (and that will happen eventually as a certainty) the total sum of the transaction fees must match the cost of mining the block they were included in. If the block costs more to mine than the value of the transaction fees in a block, miners (most) will shut down. At least so many will shut down that the network becomes insecure and Bitcoin will die.
Currently, at the existing transaction per block limit, that would mean that a fee of $1.5-$2 would have to be paid for EVERY transaction to be added to the blockchain. Alternatively, the functional or "real" value of BTC should be ten times higher to compete with an average alternative payment processor. That is of course if you look at BTC from a purely transactional and transfer point of view.
So, I'm looking for ideas as to what the ecosystem as a whole will see as a solution to this. Either Bitcoin finds mainstream adoption and the price increases to at least match the cost of mining or the blocksize will have to increase to accommodate more transactions with a lower fee. Perhaps a bit of both.
Either way, if either are to happen, Bitcoin will need to find mainstream adoption before the block reward becomes less than the cost of mining. I think I read that Satoshi said that Bitcoin would be everywhere or nowhere in 20 years and this might be what he meant. 20 years is 5 halvings of the reward. We're almost 2/5s of the way there.
Of course, I may be way off here, this is all hypothetical
Hey, great question and I look forward to getting the answer. I do have an additional question for you or someone else - are the miners really paying the transaction fees? I thought transaction fees were paid by the person who initiated the transaction. Why would miners have to pay if the fee for doing the processing work and keeping the blockchain alive.
If you think this is hijacking your thread, I'll delete the question. Thanks.
If you think this is hijacking your thread, I'll delete the question. Thanks.
Hi guys.
This has probably been discussed already but for the life of me, I cannot figure a search term to use that filters out irrelevant stuff.
Anyway, the latest block size debate has had me thinking about various inevitabilities.
What happens, specifically to the price of Bitcoin and transaction fees when the block reward drops to a negligible amount?
Let's assume tomorrow is the day that the block reward drops to 0.00001 BTC. Now, the entire mining process has to be subsidized by transaction fees. So far, so good. This was by design. However, at (I assume) 4000 transactions per block currently (I could be way off but let's go with that for now), that would mean that at today's BTC exchange rate, for miners to break even, transaction fees would need to be close to the same as the block reward for miners to bother. Let's keep it even, that would mean, at $300 per Bitcoin, the average transaction fee would have to be $1.87.
Current fiat reward for miners operating at close to break even: 25 btc* 300 usd =7500 usd
Transaction fees required for the same mining power to run the network: 7500 usd/4000 trx = 1.87 usd
Now I'm making some serious assumptions here, I get that. But at today's exchange rate/Bitcoin value, that puts Bitcoin out of business in terms of being an affordable way to make everyday transactions, especially micropayments. Granted, for larger sums, this doesn't seem like a big TX fee at all.
Now I know that block size is mutable so does this mean it's inevitable? Or does it mean that the price of BTC will have to rise to at least the cost to mine a block divided by the transactions per block multiplied by the exchange rate to be worthwhile? Doesn't this then mean that the value of Bitcoin outside it's functional value, is then ultimately determined by the block size which markets ultimately don't have control of?
Would love for someone to clear this up for me. I'm obviously missing something. For the sake of explanation, it would be good to assume that we live in a world 40 years from now where there is either no block reward or that it's so negligible that the block reward could be considered a cup of coffee. Does BTC fiat price increase to meet the collective cost of actually hashing the transaction block or does the total block transaction fee value determine it?
Would love to get some input here to help me understand. If this has been discussed before, Apologies. I'd appreciate if you could link me to the previous discussion.
This has probably been discussed already but for the life of me, I cannot figure a search term to use that filters out irrelevant stuff.
Anyway, the latest block size debate has had me thinking about various inevitabilities.
What happens, specifically to the price of Bitcoin and transaction fees when the block reward drops to a negligible amount?
Let's assume tomorrow is the day that the block reward drops to 0.00001 BTC. Now, the entire mining process has to be subsidized by transaction fees. So far, so good. This was by design. However, at (I assume) 4000 transactions per block currently (I could be way off but let's go with that for now), that would mean that at today's BTC exchange rate, for miners to break even, transaction fees would need to be close to the same as the block reward for miners to bother. Let's keep it even, that would mean, at $300 per Bitcoin, the average transaction fee would have to be $1.87.
Current fiat reward for miners operating at close to break even: 25 btc* 300 usd =7500 usd
Transaction fees required for the same mining power to run the network: 7500 usd/4000 trx = 1.87 usd
Now I'm making some serious assumptions here, I get that. But at today's exchange rate/Bitcoin value, that puts Bitcoin out of business in terms of being an affordable way to make everyday transactions, especially micropayments. Granted, for larger sums, this doesn't seem like a big TX fee at all.
Now I know that block size is mutable so does this mean it's inevitable? Or does it mean that the price of BTC will have to rise to at least the cost to mine a block divided by the transactions per block multiplied by the exchange rate to be worthwhile? Doesn't this then mean that the value of Bitcoin outside it's functional value, is then ultimately determined by the block size which markets ultimately don't have control of?
Would love for someone to clear this up for me. I'm obviously missing something. For the sake of explanation, it would be good to assume that we live in a world 40 years from now where there is either no block reward or that it's so negligible that the block reward could be considered a cup of coffee. Does BTC fiat price increase to meet the collective cost of actually hashing the transaction block or does the total block transaction fee value determine it?
Would love to get some input here to help me understand. If this has been discussed before, Apologies. I'd appreciate if you could link me to the previous discussion.
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