Incentive for generating new blocks?

MoonShadow

legendary

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Quote from: FreeMoney on August 18, 2010, 04:02:02 PM

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.

FreeMoney

legendary

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Merit: 1014

Strength in numbers

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

MoonShadow

legendary

Activity: 1708

Merit: 1007

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.

jgarzik

legendary

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Quote from: denaje on August 18, 2010, 03:29:24 PM

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.

denaje

newbie

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Merit: 0

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.)

Topic: Incentive for generating new blocks? (Read 8344 times)