Topic: Is it possible that Bitcoin becomes quiescent? - page 2. (Read 340 times)

This question has been asked several times.

I think it is going to be in the year 2140 and not in 2130 when the last Bitcoin will be mined. That is an estimate however. That is going to be more than a century from now. And so we will never be able to witness that significant day. Since it is happening at least 10 decades from now, I assume that by that time Bitcoin has already become a major currency in the world. That means the coin is already being accepted as a currency by billions of people and hundreds of millions, if not a billion, of merchants as well. That would mean that miners depending on transaction fees will not necessarily be poorer in terms of reward than they are receiving now. That is going to be worth it considering that millions of Bitcoin transactions will have to be broadcast to the network on a daily basis. Moreover, the block reward by 2140 is already lower than the smallest denomination of Bitcoin, which means it is lower than a single Satoshi. I don't know how it will be called but it might not be as juicy compared to the rewards given years or decades earlier.   

This is just an imagined scenario and I am sure by that time (a more than a hundred years from now) Bitcoin has already evolved a lot and there is a chance that today's Bitcoin can be so radically different by that time. Anyway, I am sure that a better way can be done for this seemingly problem. Remember that Bitcoin just started in 2009 and we are talking here of a possible problem that can occur in 2140 so for me I better not think so much about it, this is just a waste of time. In most probability,  Satoshi Nakamoto could have surfaced at that time and he can be the one solving this problem. And I am just kidding...

Even if people hodling bitcoin consider it as store of wealth, there is still a huge transaction that can happen, how could this be? There's a lot of traders around the world that utilizes cryptocurrency. They are treating bitcoin as a store of wealth and at the same time, continuously trading it to make profits. In this case, miners will still be busy and the market is still profitable. What we can expect is a huge market price as bitcoin's volume is being mined.

OP has a valid hypothetical question but my answer is a straightforward No! Bitcoin will not become inactive especially when all of it has been mined and thus will result to a more wider distribution of it.

I think there are two possible scenarios concerning mining that will come into play when all Bitcoin has been mined:

1. Bitcoin's price has achieved its ATH by then that mining it (even if the rewards comes from transaction fees) is still attractive or could be more profitable than the current mining situation right now.

2. Bitcoin's miners have ceased to do mining but will eventually be replaced by stakeholders, enthusiasts and supporters who want to "keep the network alive" and eventually protect the value of their Bitcoin holdings. So, mining will still continue no matter what. Imho.

I'm very much confused here. Who came out with the idea that in the year 2130, all Bitcoin will be mined? I have read through the whitepaper of Bitcoin from head to toe for several times but didn't come across anything like 2130 all bitcoin will be mined. The blockchain network of Bitcoin is designed in such a way that, having a bitcoin wallet on your computer automatically sync you to the network. This makes a passive use of your CPU power without you noticing anything. This implies that even if all Bitcoins are mined, the blockchain network of bitcoin will still be intact so far as people still have bitcoin wallets and still owns bitcoins in their wallet.

The network will continue to operate well. This is a sense of the Bitcoin blockchain, it will not die after the end of the mining

When you say "a lot of computers would pull out of the Bitcoin Network", I assume you mean that there will be very little hash power?  And you also mean that more than half of the hash power that is present will potentially be controlled by a single entity?

If that is true...  Then people will NOT use Bitcoin as a store of wealth. It is the hashpower that makes the blockchain indelible.  If the blockchain is not indelible, then Bitcoin is not a good store of wealth.

But, if people are not going to use Bitcoin as a store of wealth, then you no longer need to be concerned about there being very few transactions. You yourself said:
"if most people are using Bitcoin just as a store of wealth, then there are very few transactions"

So, if most people are NOT using Bitcoin just as a store of wealth, then there are NOT very few transactions.

Since there are lots of transactions, there are lots of fees available for miners.  This means that there are lots of miners providing lots of hash power, which results in a very secure and indelible blockchain (they all want to earn from those transaction fees).

Since the blockchain has lots of hash power and is very secure and indelible, that means that it can be used as a store of wealth.

Interesting how that feedback loop works, isn't it?

Seems like the feedback might cause a natural balance where there are enough transactions to pay for the mining and any excess can sit in storage if the owners of the funds prefer.

If we are talking about the transaction volume happening now then it might not be appealing for the miners to run their hardware without any kind of block reward. But if you consider the mass adoption and favorable laws coming into our world going forward to that year then we might actually see an exponential growth of demand for Bitcoin's price as well as overall use for it. It might even be more ideal for miners to run their operations then with the big amount of transactions happening once that digital age rises. And that's me just talking realistically with the things I have been seeing now.

There is always going to be a lot of people holding BTC as an investment/unit of storage, I would even argue that this is more commonplace then using it nowadays.

BTC won't have all been mined out during 2130, I reckon you'll need to give it another 10 years after that, and we'll still need to assume that this technology is still used by other people, which seems unlikely...

During that point, likely transaction fees would go up and miners would earn their money that way.

This is again the incomprehension of working with deflationary currency, it is the disease the Chicago school of economy has installed in most people brain's, so they can fear it and let "their model" "work.

Well no.

Deflationary money is money that doesn't lose value over time, therefore you don't need "a bank paying you interest". What you keep yourself, increases its purchasing power overtime, so you get an automatic incentive to NOT spend what you don't need (contrary to consumerism).

Once you DO decide to invest or spend, the money comes from a solid source. In the current dominant mentality, they'd rather you get in debt to buy as many things as you can, and then slave yourself paying it all back many times higher than if you had waited and saved to buy the thing.

One thing with deflation is you don't need banks as much, and banks should not be operating under fractional reserve, ie, fictional money that doesn't exist anywhere but is counted as it it where (90% of fiat money doesn't exist. maybe more, its a legalized ponzi scheme).

In the end, without the banks or the debt, you save your own money earned working, and trust that i will hold its purchasing value no matter what. And if you decide to spend it, you spend it and that's it. Austrian economists don't need fractional reserve, and therefore no central banks, and of course no fiat currency. They originally advocated for gold, but i think Bitcoin fits even better.

Fiat currency you want to get rid of it ASAP, as its constantly losing value. Bitcoin you keep as much as you can. and only use what you must.

Not really, someone will always counter the 51% attack. If someone has a possibility of doing a 51% attack, the rest of the network will probably react to this. Not to mention that the pools who have this kind of power would be considered "trustable" at some point.

Nowadays most use Bitcoin as an investment, not only as a store of value. But after some more halvings and after Bitcoin is mature and widely adopted, the value may become rather stable and using it as investment may not bring such high reward.
And Bitcoin primary meaning is to be used as a coin. The store of value is a "secondary effect" of all good/successful coins (back in the days when inflation was big I kept my savings in USD/EUR!).
That's why the development goes in the direction to make the use of Bitcoin-as-a-coin go faster and better.

So I expect Bitcoin get used in 2130 as a coin much more than today.
I don't know how much of the transactions will be off-chain and how much on-chain, but we clearly have to keep miners happy even then (the problems will start much earlier than 2130 actually).


As said by @Deathwing, the network will continue to work even then, just at a lower difficulty, if the miners leave. But if the difficulty drops too much, at some point the network could become vulnerable to 51% attack. So ... we have to find long term solutions to keep the miners happy.

"which means there is very little reward for mining and so a lot of computers would pull out of the Bitcoin network."

So? The blockchain will adjust itself automatically. If we look at a fictional scenario where every, and I mean every single ASIC miner has left. The difficulty is going to drop well enough so that maybe you might be able to mine Bitcoins then. No matter how many miners leave, network will adjust itself to sustain the transactions.

In the year 2130 all of the Bitcoins will have been mined and the only reward at this point is transaction fees,if most people are using Bitcoin just as a store of wealth, then there are very few transactions, which means there is very little reward for mining and so a lot of computers would pull out of the Bitcoin network. Would this be a problem? If large Bitcoin transactions occured sparingly in 2130 and beyond, would the Bitcoin concept still work?