Author

Topic: Incentive for generating new blocks? (Read 8310 times)

legendary
Activity: 1708
Merit: 1001
August 18, 2010, 06:05:11 PM
#5
IF people with a stake in BTC generate to keep the system going THEN fees will be low enough not to be an incentive themselves. ELSE fees will rise until fees are an adequate incentive.

http://www.bitcoin.org/wiki/doku.php?id=transaction_fee

True, the supply of privately supplied computational power will rise to meet the demand or the computational power will decrease to meet the demand.  Either way, it'll balance out in the long term.  Unless we hit the 'singularity' before then, only my grandchildren will have to worry about such things.
legendary
Activity: 1246
Merit: 1014
Strength in numbers
August 18, 2010, 04:02:02 PM
#4
IF people with a stake in BTC generate to keep the system going THEN fees will be low enough not to be an incentive themselves. ELSE fees will rise until fees are an adequate incentive.

http://www.bitcoin.org/wiki/doku.php?id=transaction_fee
legendary
Activity: 1708
Merit: 1001
August 18, 2010, 03:33:46 PM
#3
If you are still alive in 120+ years, you probably will not *personally" care to be generating blocks.  However, assuming bitcoin is still running then, anyone who has a large number of bitcoins is going to still have a personal incentive to keep the currency strong; even if the transaction fees are too small to compete over.
legendary
Activity: 1596
Merit: 1022
August 18, 2010, 03:33:38 PM
#2
Currently, there is a clear incentive to spending CPU time to generate blocks.  For every block I generate, I get 50 BTC.  But when the 21mil BTC mark is reached and no more BTC are being generated, would it be correct to say that I would have no incentive to spend costly electricity to generate new blocks, since I don't get anything more out of it?

You get transaction fees.

newbie
Activity: 2
Merit: 0
August 18, 2010, 03:29:24 PM
#1
Currently, there is a clear incentive to spending CPU time to generate blocks.  For every block I generate, I get 50 BTC.  But when the 21mil BTC mark is reached and no more BTC are being generated, would it be correct to say that I would have no incentive to spend costly electricity to generate new blocks, since I don't get anything more out of it?  If that's the case, what if the majority of people stopped generating blocks? Wouldn't that destroy the underlying security of the Bitcoin system?

(Forgive me if I grossly misunderstand the nature of generating blocks.)
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