Topic: Changing Bitcoin subsidy algorithm (Read 340 times)

He also didn't consider what cryptocurrency miners will switch to. Bitcoin Cash ABC? SV? Bitcoin X? Bitcoin's model with the small block size/fee market is superior from a security perspective. It will show after a few halvings.

That sounds like FUD to me. I say "FUD" because I don't believe you have anything to back up your claims.

Can you explain how you arrived at the conclusion that Bitcoin will collapse if the price doesn't double?

People were mining profitably when the price was ¹/₁₀₀ of what it is now. Profitability does not require the price to double.

No. Even if the price drops, some miners will still be profitable.

No. Even if the price drops, then some miners will continue mining because it is still profitable.


That's crazy talk. There is no basis for those statements. What happens in March?


Yes. That is why nothing else that you wrote is true.

I agree. For better or worse, there's no way the Bitcoin network will accept attempts at increasing the block subsidy.

Bitcoin's economic design was experimental, and we're seeing the experiment through. Other coins can try other models. Maybe they will be more successful in the end. But as long as we don't allow significantly increased block sizes, I wouldn't assume Bitcoin's model is unsustainable. Fees should rise with demand. And with Bitcoin mining currently being heavily speculation-driven, the network can afford some declining hash rate in the case that rising fees and price can't maintain the current hash rate trajectory.

OP, many "developers" have come and tried to change the rules. But it would be easier for you to start developing your own ideas through an altcoin, or start your own altcoin.

Or join the Bitcoin mailing list , and propose it there, where the Core developers can give you some feed back.

and i think you are being too pessimistic and want to see an iceberg in the fog.
which price are you considering as the base when you say "double"? the current price? the peak of the last bubble? or the price when last halving happened?! last time block reward halved price was ~600 and now it is nearly $10k! that is not just double, that is 1500% rise.
also as Thirdspace said about difficulty, it is designed in a way that mining is always profitable.

as for those altcoins, they are centralized. they can not even be an alternative to bitcoin. investors are investing in those already but they have always been doing it short term for pump and dumps not for long term nor for usage. obviously something like Libra that has a big "brand" behind it will have its time just as Paypal already has! but none of it will have anything to do with bitcoin.

mining isn't supposed to be all about making profit
its main purpose is securing bitcoin network while minting new coins and collecting transaction fee

yes as profit decreases, some miners will switch and fewer will stay
then difficulty adjusted, price corrected and a new equilibrium is reached

I mean, yeah, that's precisely what's going to happen so what's the deal? Some things are simple like that. There will always be a profitability equilibrium.

The banks will not be able to "grab" the "be your own bank" people, neither the ones that understand the tech.

As long as the hash rate keeps growing, I think that Bitcoin is fine. And Monero can be a good testing ground for the idea, so I'd also give it time.

I think that you guys are very optimistic... we are heading to an iceberg.
The profitability about Bitcoin mining is at stake. The only way that 'nothing happen' is that Bitcoin double its value to compensate. This is not going to happen this time because, there is a red line where the investors will not go, and rather will spend their money on another crypto. It is not a coincidence that Libra will be launched officially at this precise time.

The banks behind XRP, LIBRA or EOS are just waiting that BTC hit the iceberg to take the lead and that will be the end of Bitcoin as the leading crypto.

Think about it. What if the value of BTC do not double? Then the mining will not be profitable, all the mining gears will lost profitability, all the miners will switch to another currency. This will trigger a domino effect and in March 2020 all who have Bitcoins will cry because money will flow out of Bitcoin to something else.
Now you may say that if many stop mining Bitcoin, then the difficulty will readjust.

All of this is like an Earthquake in the Crypto...

Bitcoin will see its dominance fading and the banks will take the lead.

Fixing Bitcoin at this point will be too late.

that is not enough for starting an argument about changing the block rewards and result in change of bitcoin supply. if it ain't broke, don't fix it.
if some day in the future, we started facing this problem and the risk of 51% attack and loss of network security was becoming serious, we can then start this discussion. but now the information we have suggests that the price is more than enough to cover the cost and a lot more, so the incentive will remain.
not to mention that in this pessimistic scenario if the usage and price has dropped significantly that it can no longer cover the costs, then the incentive to attack bitcoin isn't there anymore either. just like there is no incentive to attack altcoins with small hashrate whereas you can easily do it, even the big ones like BCH can easily be 51% attacked (just like they did reverse blocks by 51% attacking it in May this year).

That's a very pessimistic prevision on the price/transactions volume /etc.
Because nowadays bitcoin is already consuming a lot of energy, like a small country. That means that if some government wanted to attack, it could cause a blackout or something like that.

Also we are talking about 2100+
If bitcoin has so small volume, nobody would even care to 51% attack it. It will be dead or very powerful

The argument over subsidy vs. transaction fees boils down to who is to pay for the security. The subsidy charges Bitcoin holders (through inflation), while transaction fees charge Bitcoin users.

BTW, it is important for holders to understand that as the subsidy is reduced, the integrity of their "store of value" depends more and more on Bitcoin being used as a "medium of exchange" because that is the basis for its security.

The idea which you have proposed is more or less similar to the Monero algorithm. Once after the May 31 2022 event, 0.3 XMR/minute would be fed continuously forever into the system. As bitmover said, if there are lesser Miners the difficulty would decrease and vice versa. Similarly, we are just in the earlier stages of cryptocurrency era. As days passes, developers would come with various ideas to scale the network and include more transactions to the block. With this, the miners would never run out of the profit as if more and more transactions are added to each block the more transaction fees would be received for mining each block. I do agree transaction fees would skyrocket for each block and it is more important to note how many transactions are added to each block.

Consider like, for mining each block miners receive around 10 BTC as transaction fees where 100,000 transactions are added to each block with 0.0001 BTC being fee for each transaction. At the current rate around 2000 transactions are being added for each block. If developers find a way to reduce the transactions sizes and weight even more, we could scale somewhere around 100,000 transactions in the near future. Miners don't need any block reward to keep their mining profitable since transaction fees will do the work more effectively.

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Apart from this changing the total supply is like disturbing the consensus which satoshi has created 9 years back. The idea for a finite supply is totally good for the network and as a whole for the cryptocurrency. Along with that, the proposed idea would lead to a unsuccessful fork of the network.

Bitcoin halving and the whole fee system is sustainable in long term IMO.

If after halving mining becomes unprofitable (or less profitable), miners who are located where energy is more expensive will simple stop mining, reducing total hash rate of the network.

Then mining will become profitable again, when hashrate reduces. They will survive just with the fees, because the hash rate is proportional to the profitability.

Regardless of whether such a change would ever make it into Bitcoin -- what are your arguments against the current block subsidy algorithm and what are your arguments for applying a continuous, trailing coin issuance rate?

I'm a bit on the fence myself so it'd be interesting to hear the opinion of someone who has spent a bit more time thinking about block subsidy rates.

I love Bitcoin, and I love how it is working. However there is one point that I think is a mistake.

The subsidy algorithm.

It seems that in 2010 when Bitcoin was almost abandoned or run by a few, the modélisation of the subsidy from gold mining was making sense. Gold mining has a finite supply, so has Bitcoin.
Today, with +5000 Bitcoin ATM and growing, it seems that Bitcoin has taken another direction. Monnaies never stop to be minted, at least to replace the lost coins for example.

Having the mining rewards divided by 2 every 4 years is a major liability for Bitcoin. Ripple, and all the ERC-20 contracts that can be minted almost définitivement are waiting that Bitcoin weaken to take the lead, and about this specific issue, Bitcoin has a real problem.

While I was working on Kryptofranc (KYF) and FRANC, I came to the conclusion that the subsidy had something wrong, so I have created an algorithm that mine forever.

My suggestion would be to switch to this type of logic, before the next halving, and let Bitcoin enjoy a smooth mining future, that will not jeopardize the miners and their investments because of an obsolete mining design.

The consequences/changes for Bitcoin would be to:

1- re-adjust the mining reward every bloc
2- increase the total number of Bitcoin mined, since it is mining longer.

What would not change is:
- the number of coin generated by each bloc... instead of being halved, this number would start to very slowly decrease, almost in-definitively (at least for the next 10,000 year)

I am afraid that if the Bitcoin core team does not take these steps, Bitcoin will have some trouble to lead the Crypto in the future, and possibility face a existential thread.

If there is some interest about this idea, I can come with a tailored algorithm and a simulation, even the source code of GetBlockSubsidy that would fix the problem.

Here is the Kryptofranc Subsidy simulation. This algorithm can be modified to match the characteristics of Bitcoin as of Feb 2020, and switch to the new algorithms at a specific block, before the halving occurs.
https://kryptofranc.com/kyf-100y.php