Can miners switch to transactions rather than mining?

pooya87

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Quote from: BlackHatCoiner on April 05, 2021, 01:48:01 AM

(Un)[/color]Fortunately, this will happen much sooner than once we mine the 21,000,000th coin. Looking at the graph, in 2040, every block will reward only 0.1953125 bitcoins, so you should consider that it may be more profitable to gain all the transaction fees, than the block reward, before 2140.

It is always more profitable for miners to get transactions that are paying much higher fee, but it has always been profitable for miners to mine bitcoin because of how bitcoin price has been moving.
For example when miners were receiving 50 bitcoins per block they were actually earning less than a dollar per block. Now that they are receiving 87.5% less meaning 6.25 bitcoin they are earning 36000000% more money (nearly $368k).

Saying they need fees when reward is ~0.19 is ignoring the price movements. 0.19BTC could be giving them a million bucks in 2040!

buwaytress

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Quote from: BlackHatCoiner on April 05, 2021, 01:48:01 AM

The only terrifying thing to think is the total transactions in the mempool, because after all, that's bitcoin.

I'm not sure it's a problem. Difficulty will always adjust to gain the same average of 1 block per 10 minutes. So it might create a temporary backlog but only until difficulty is adjusted. And by then, 2040? I'd be surprised if more scaling solutions aren't implemented or people aren't just using L2 for micro txs. A lot of time in between to address.

OcTradism

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Quote from: Boydie on April 05, 2021, 12:57:18 AM

I’ve read some articles about miners processing transaction once BTC is fully mined, will this happen in the current pool setup ie antpool/slush pool or do miners connect to something different

Miners process bitcoin transactions after the genesis block because bitcoin network is a Proof-of-work network. It will be a dead network if no miner is mining bitcoin.

When the block rewards fall to very low and after all bitcoin in total supply is mined, miners will only do their main work: verify and confirm transactions. They will receive rewards from transaction fees, not from bitcoin block rewards as of now.

In 2140, how much does one bitcoin cost? How much does 1 thousand of satoshis cost? Even thousand of satoshis will be a big money for miners. They won't need to get block rewards in 2140 to pay their power bills.

avikz

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Quote from: Boydie on April 05, 2021, 12:57:18 AM

I’ve read some articles about miners processing transaction once BTC is fully mined, will this happen in the current pool setup ie antpool/slush pool or do miners connect to something different

I don't think the current mining pools will be closed once all bitcoins are mined (possibly in 2140). Because the mining structure will remain as it is. It's just the mining rewards will be different and smaller because the standard block reward will be diminished. Rather, the network difficulty will be adjusted according to this so that a whole lot of people will be able to profit from bitcoin mining (it's an assumption).

So mining pools have no reason to close itself out of operation just because all bitcoins are mined.

Innerpumper

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I think the distribution of bitcoin is taken from the current supply of mysteries. When all the supply is mined then the circulation will be the same as the max supply. Transaction fees also affect mining rewards.

Husires

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Quote from: Boydie on April 05, 2021, 12:57:18 AM

I’ve read some articles about miners processing transaction once BTC is fully mined

Do not read these articles specifically, press articles. They are looking for excitement in the news they do not apologize for passing on misleading or incorrect information, and sometimes they do not verify the sources. You can ask here or in the mining section, and you will find better answers.

When you mine a block, you get the reward and tx fee that was included in the block.
When the block reward end all that remains is tx fees. Mining is a activity that is based on the cost of mining. It will continue as long as the network is running efficiently, and many people may mine not for profit, but to ensure network decentralization.

BlackHatCoiner

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Quote from: Boydie on April 05, 2021, 12:57:18 AM

I’ve read some articles about miners processing transaction once BTC is fully mined

(Un)Fortunately, this will happen much sooner than once we mine the 21,000,000th coin. Looking at the graph, in 2040, every block will reward only 0.1953125 bitcoins, so you should consider that it may be more profitable to gain all the transaction fees, than the block reward, before 2140.

Whether it'll be more profitable or not, this proof of work competition (AKA mining) is made in a way to always work. It'll never stop. If the 0.19 BTC aren't enough for covering miners' expanses, then they'll stop mining. This will result on difficulty decrease which will then be profitable for some miners, with fewer expanses! The only terrifying thing to think is the total transactions in the mempool, because after all, that's bitcoin.

ranochigo

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Transaction fees will be the only income source for the miners with block rewards eliminated from the equation. This ensures that the miners will still be compensated to some extent even when there is no block rewards. In addition, the difficulty will adjust to an equilibrium such that certain groups of people will still be able to profit from it.

I don't think pools would be eliminated by then; the purpose of a pool is to reduce the varience when mining and when the profit margin gets slimmer, it is to the miner's advantage to keep their earnings consistent. Though I'd imagine that a large part of the miners would start to lottery mine and try to mine a block themselves just like what some people with moderately obsolete hardware are doing.

Boydie

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I’ve read some articles about miners processing transaction once BTC is fully mined, will this happen in the current pool setup ie antpool/slush pool or do miners connect to something different

Topic: Can miners switch to transactions rather than mining? (Read 165 times)