Bitcoin's Future: What Happens When the Block Reward is Lower Than Fees? - page 2.

NeuroticFish

legendary

Activity: 3668

Merit: 6382

Looking for campaign manager? Contact icopress!

Quote from: Sr.Urbanist on December 18, 2022, 12:57:12 PM

What do you think will happen when the block reward subsidy is 1.5625 BTC

The fact bitcoin will be so difficult to earn should make the price go significantly higher.
The fact LN and maybe similar solutions will be used on a larger scale may make tx fees even go lower.

So imho comparing the block reward with the tx fees is useless/counterproductive. I think that block reward + tx fees should be compared with the fiat cost of mining a block, and then we would see how much one Bitcoin worth.
Of course, various modifiers have to be taken into account, from the more performant machines by then to many more using very cheap energy from the sun. Also don't forget the inflation of fiat.
But that's all. I don't understand why you've tried to overcomplicate the equation, but I see no problem with block reward going lower than the tx fees, even though I expect that happen significantly later than your predicted time frame.

fennic

member

Activity: 126

Merit: 39

Quote from: Sr.Urbanist on December 18, 2022, 12:57:12 PM

I was lucky enough to be around Bitcoin mining when the rewards were sky-high and the competition wasn't as fierce. But as time has passed and the difficulty has skyrocketed. It's become almost impossible to turn a profit with mining. I still remember when I first got my S9 and it was bringing in a cool $25-$100 per day, but those days are long gone and the rewards just aren't what they used to be.

I've been thinking a lot about what will happen when the block reward subsidy drops below 2 BTC in a little over 5 years. According to the original white paper, the goal was for fees to eventually overtake the subsidy, but there was no specific timeline given. If the price of Bitcoin is high enough to make up for the lower subsidy with miner fees, it could cost an exorbitant amount to send Bitcoin. This could put pressure toward using centralized services like exchanges and WatchTowers on the Lightning Network for using Bitcoin. If the cost of sending Bitcoin remains low, mining will become more and more reliant on cheap electricity.

It's hard to predict exactly what will happen, but I'm curious to hear what others think. What do you think will happen when the block reward subsidy is 1.5625 BTC in a little over 5 years?

So in my opinion if Bitcoin Mining fee is more than block reward in terms Of Price The Price will be much higher. My mean that if Bitcoin mining fee is 0.01 BTC per block and reward is 0.01 Btc Per block than Prices of Bitcoin will be skyhigh cause there will be no Bitcoin to mine and there will be no pressure of selling and also bad News regarding Bitcoin. Currently we have been listening to the China Mining Fud and eventually it will be gone by the time.

altair_tech

copper member

Activity: 86

Merit: 78

My take is a bit controversial in some circles, but I'd post it here because I really believe in it.
Satoshi probably intended the block reward as a temporary subsidy to bootstrap the network and pay the miners until there was enough economic activity that miners have sufficient compensation from transaction fees.
So, shrinking block rewards isn't a problem, even if BTC prices don't rise much from here. Just my 2 cents.

BitDane

sr. member

Activity: 1372

Merit: 348

Economically, it isn't hard to predict what would be the action of miners. If the mining become not profitable, those who are mining just for profit will definitely stop. Those left would be miners who take Bitcoin mining as hobby and does not take importance of profit.

I believe Satoshi had a vision that in due time, transaction fee will overtake the reward of Bitcoin in hopes that adoption will do well that miners won't mind getting a fraction of Bitcoin in every block reward because Bitcoin transaction fee is there to compensate .

So the Bitcoin mining future depends on the adoption and usage of BTC. If these (adoptions and usage) sector fail, it is inevitable that Bitcoin mining sector will suffer greatly and if it does, we can possibly see a huge decline of hashing power securing the Bitcoin network.

Quote

It's hard to predict exactly what will happen, but I'm curious to hear what others think. What do you think will happen when the block reward subsidy is 1.5625 BTC in a little over 5 years?

As long as the bitcoin price doesn't tank, recover and records another ATH, I think 1.5625 BTC is still sufficient for the miners to sustain their activity.

Sr.Urbanist

full member

Activity: 315

Merit: 120

I was lucky enough to be around Bitcoin mining when the rewards were sky-high and the competition wasn't as fierce. But as time has passed and the difficulty has skyrocketed. It's become almost impossible to turn a profit with mining. I still remember when I first got my S9 and it was bringing in a cool $25-$100 per day, but those days are long gone and the rewards just aren't what they used to be.

I've been thinking a lot about what will happen when the block reward subsidy drops below 2 BTC in a little over 5 years. According to the original white paper, the goal was for fees to eventually overtake the subsidy, but there was no specific timeline given. If the price of Bitcoin is high enough to make up for the lower subsidy with miner fees, it could cost an exorbitant amount to send Bitcoin. This could put pressure toward using centralized services like exchanges and WatchTowers on the Lightning Network for using Bitcoin. If the cost of sending Bitcoin remains low, mining will become more and more reliant on cheap electricity.

It's hard to predict exactly what will happen, but I'm curious to hear what others think. What do you think will happen when the block reward subsidy is 1.5625 BTC in a little over 5 years?

Topic: Bitcoin's Future: What Happens When the Block Reward is Lower Than Fees? - page 2. (Read 403 times)