In the simplest terms, mining is the process of hashing the block header repeatedly changing one parameter, until the resulting hash matches a specific target. The hash
function’s result cannot be determined in advance, nor can a pattern be created that will produce a specific hash value.This feature of hash functions means that the only way
to produce a hash result matching a specific target is to try again and again, randomly modifying the input until the desired hash result appears by chance.In this highly competitive environment, individual miners working alone (also known as solo miners) don’t stand a chance . The likelihood of them finding a block to offset and their electricity and hardware costs is so low that it represents a gamble, like playing the lottery.
Source- https://cryptocomes.com/wikicoin/what-will-happen-when-all-21-million-bitcoins-are-mined
Topic: How will Minors survive when all BitCoins are Mined? (Read 293 times)
Are you saying out of 12.5 bitcoins mined that 0.71486 is for fees? -snip-
That's just a "quick look", we need to consider many things and possible future layers like Lightning Network to be more realistic.It may (IMO, it will) be lower than today's transaction fee earning due to the fact that if Bitcoin's price grow beyond "high", developers and users might lower the minimum fee to a fraction of a satoshi or/and lower the maximum as well.
Another one is if LN become mainstream, there will be fewer on-chain transactions than we're experiencing today that will generally lower the fee earnings of miners.
It's too early to discuss that though.
I think that when all the coins have been mined there will be plenty of coins and users in circulation to probably make even more work for the miners then the current block release rate. I do wonder if anyone knows the ratio of mining fee mining vs mining of the new block on the blockchain. I tried to google it but I never found anything. It would be a way to calculate the future after all bitcoins are mined and we can better answer your question.
Are you saying out of 12.5 bitcoins mined that 0.71486 is for fees? If so that would probably the fees ration at 33%-40% buy 2040 at the current rate of use not taking into account the possible increase in ration of new users / the number of bitcoins in circulation at the time. I think by 2040 that the fees will probably surpass the amount mined during the last block. After that the fees will be above the amount we would normally mine or at least be reaching there. Maybe even more who knows. By then bitcoin holders will be rich. Can you image when the halves goes down so that a block mined is a small fraction of a bitcoin? NBitcoin owneds now probably hold entire blocks worth of mined bitcoin. So your holdings now will be like 100000x harder to get in 2040. $1 bitcoin maybe is $10000 by then or more. That is why I still say we are all still early adopters. Perhaps even anyone who buys bitcoin before the last block is mined will be in green profit. Now image us who are years ahead of this. xD
To give you a quick look at the average reward after "that" happened, you can just look at the current blocks' coinbase transaction's output and deduct the "Block Reward" from it.
For example:
Block #583560 has this coinbase transaction: a1a57bb8a361bf6c59275eef61d02185c1769ba99e936679105e022f0c9fa11e with an output amount of 13.21486332 BTC.
Deduct the current block reward from it which is 12.5BTC.
The miner's "Transaction fee earning" is 0.71486332BTC.
By that time, we hope that the value of BTC become phenomenal or else.... the total network hashrate might plummet, thus the Blockchain's security against 51% attack.
For example:
Block #583560 has this coinbase transaction: a1a57bb8a361bf6c59275eef61d02185c1769ba99e936679105e022f0c9fa11e with an output amount of 13.21486332 BTC.
Deduct the current block reward from it which is 12.5BTC.
The miner's "Transaction fee earning" is 0.71486332BTC.
By that time, we hope that the value of BTC become phenomenal or else.... the total network hashrate might plummet, thus the Blockchain's security against 51% attack.
Are you saying out of 12.5 bitcoins mined that 0.71486 is for fees? If so that would probably the fees ration at 33%-40% buy 2040 at the current rate of use not taking into account the possible increase in ration of new users / the number of bitcoins in circulation at the time. I think by 2040 that the fees will probably surpass the amount mined during the last block. After that the fees will be above the amount we would normally mine or at least be reaching there. Maybe even more who knows. By then bitcoin holders will be rich. Can you image when the halves goes down so that a block mined is a small fraction of a bitcoin? NBitcoin owneds now probably hold entire blocks worth of mined bitcoin. So your holdings now will be like 100000x harder to get in 2040. $1 bitcoin maybe is $10000 by then or more. That is why I still say we are all still early adopters. Perhaps even anyone who buys bitcoin before the last block is mined will be in green profit. Now image us who are years ahead of this. xD
<...>
Bitcoin mining is estimated to end around 2140. That’s quite a long way down the road, and none of us here will get to see it. Miners will have to shift to just monetarizing TX fees. Will Fees suffice? who knows. It’s such a long way down the road that we can’t really tell yet.This will be an issue long, long before 2140. By my back-of-the-envelope calculations, after only three more halvings, there will be around 600,000 bitcoins -- or 2.8% of the supply -- left to be mined. We won't be waiting hundreds of years to see if fees adequately replace inflation. More like a decade or two.
To give you a quick look at the average reward after "that" happened, you can just look at the current blocks' coinbase transaction's output and deduct the "Block Reward" from it.
For example:
Block #583560 has this coinbase transaction: a1a57bb8a361bf6c59275eef61d02185c1769ba99e936679105e022f0c9fa11e with an output amount of 13.21486332 BTC.
Deduct the current block reward from it which is 12.5BTC.
The miner's "Transaction fee earning" is 0.71486332BTC.
By that time, we hope that the value of BTC become phenomenal or else.... the total network hashrate might plummet, thus the Blockchain's security against 51% attack.
For example:
Block #583560 has this coinbase transaction: a1a57bb8a361bf6c59275eef61d02185c1769ba99e936679105e022f0c9fa11e with an output amount of 13.21486332 BTC.
Deduct the current block reward from it which is 12.5BTC.
The miner's "Transaction fee earning" is 0.71486332BTC.
By that time, we hope that the value of BTC become phenomenal or else.... the total network hashrate might plummet, thus the Blockchain's security against 51% attack.
I would like to quote few lines from Mastering Bitcoin Chapter 10 (page 213)
About the survival of miners, Miners always pick the transactions that have more transaction fee this happens even now. What I think is if the miners increase the transaction fee then its the users who have to pay the transaction fee demanded but, due you really think all the users will agree to pay huge BTC for single transaction.
Instead What I see in this case is the creation of BTC is over that is(supply is zero) and the awareness and adoption of bitcoin is increased thus, demand increased. This mismatch in the supply and demand chain can lead to increase in the price of BTC. If the price of BTC increases then minors can survive with what ever transaction fee is getting gathered. As even the fraction of BTC is if sound value.
Also, the reward is not getting stopped immediately. It is gradually happening through a process called halving. Eventually, over the years the price and adoption of BTC will be so high that there is be no need for miners to think of their survival.
This is my though. If you think what I think has any loopholes please do comment I would be greatful for you knowledge sharing.
Quote
The word "mining" is somewhat misleading. By evoking the extraction of the precious metals, it focuses our attention on the reward for mining, the new bitcoins created in each block. Although mining is incentivized by this reward, the primary purpose of mining is not the reward or the generation of new coins. If you view mining only as the process by which coins are created, you are mistaking the means(incentives) as the goal of the process. Mining is the mechanism that underpins the decentralized clearinghouse, by which transactions are validated and cleared. Mining is the invention that makes bitcoin special, a decentralized security mechanism that is the basis for P2P digital cash
About the survival of miners, Miners always pick the transactions that have more transaction fee this happens even now. What I think is if the miners increase the transaction fee then its the users who have to pay the transaction fee demanded but, due you really think all the users will agree to pay huge BTC for single transaction.
Instead What I see in this case is the creation of BTC is over that is(supply is zero) and the awareness and adoption of bitcoin is increased thus, demand increased. This mismatch in the supply and demand chain can lead to increase in the price of BTC. If the price of BTC increases then minors can survive with what ever transaction fee is getting gathered. As even the fraction of BTC is if sound value.
Also, the reward is not getting stopped immediately. It is gradually happening through a process called halving. Eventually, over the years the price and adoption of BTC will be so high that there is be no need for miners to think of their survival.
This is my though. If you think what I think has any loopholes please do comment I would be greatful for you knowledge sharing.
Some speculate that fees will be enough to keep the miners satisfied while others think the inflation rate of bitcoin is just temporary and everyone will eventually agree to keep it at a sustainable rate instead of the continual halvings.
Satoshi called coinbase transactions as "incentive" in bitcoin whitepaper. It is just an incentive, and it is meant to end. I see no problem, as the incentive is needed only while adoption is growing. And as adopting grows, incentive get lower (halving).
I agree that we will have a drastically increase in the number of TXs, but I don't think fees will rise.
If there are too many TXs, fees can be low and even so miners get a good reward. If fees are not enough to keep mining profitable at current hash rates, miners will leave and hash rate will drop, making mining profitable again. The system is able to auto regulate itself, and users are also part of this regulation, by choosing low fees when transactioning.
In an “ideal” scenario where BTC is used on a daily basis for everyday purchases, the number of BTC TXs would increase drastically to levels very distant from the current ones, giving an edge to capitalizing on TX fees. TX fees themselves will also rise as well, and I’m pretty sure we’ll see some technological changes that facilitate all this.
I agree that we will have a drastically increase in the number of TXs, but I don't think fees will rise.
If there are too many TXs, fees can be low and even so miners get a good reward. If fees are not enough to keep mining profitable at current hash rates, miners will leave and hash rate will drop, making mining profitable again. The system is able to auto regulate itself, and users are also part of this regulation, by choosing low fees when transactioning.
<...>
Bitcoin mining is estimated to end around 2140. That’s quite a long way down the road, and none of us here will get to see it. Miners will have to shift to just monetarizing TX fees. Will Fees suffice? who knows. It’s such a long way down the road that we can’t really tell yet. In an “ideal” scenario where BTC is used on a daily basis for everyday purchases, the number of BTC TXs would increase drastically to levels very distant from the current ones, giving an edge to capitalizing on TX fees. TX fees themselves will also rise as well, and I’m pretty sure we’ll see some technological changes that facilitate all this.
Note: Minors -> Miners (minors will survice regardless).
They will still earn a bit here and there on the transaction fees, that is correct.
And this is another thought:
Source:
https://news.bitcoin.com/what-happens-bitcoin-miners-all-coins-mined/
Quote
It is entirely possible that mining chips will become so small and cheap that they can be installed on all electronic devices — similar to the goal 21 Inc. hopes to achieve. This development would turn mining from a purposeful business decision to an after thought, surviving in the background of daily life. Furthermore, mining hardware may become so energy efficient over the next century that transaction fees prove to be plenty to keep miners in business.
And this is another thought:
Quote
It may also be the case that transaction fees simply rise to a level sufficient for mining profitability. If, once all the bitcoins have been mined, the entire world uses the digital currency as its primary medium of exchange, then it is possible that transaction fees will rise due to an increase in the demand for transactions.
Source:
https://news.bitcoin.com/what-happens-bitcoin-miners-all-coins-mined/
When all 21 Million BitCoins are mined what will happen to the mining setup that miners have and how will they survive. As per my understanding they will still be getting the transaction fees. Any other way Minors will be able to survive?
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