Mining profitability | Bitcointalksearch.org

stompix

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Quote from: jackg on July 01, 2020, 01:17:23 PM

As mentioned the block reward will keep halving until it's below 0.01 btc (not sure of the exact number) but current cumulative transaction fees are 0.13BTC so the current average miners are paid would be 6.38 instead of the 6.25... .

The block reward will drop to one satoshi in the end, but it's likely that in just 4 more halvings the reward from the fees will compete with the reward from the mining block, by that time it will only be 0.39 BTC, the last block mined as I'm typing this (637353) had 0.48BTC in fees.

Quote from: Wingsbtc on July 02, 2020, 09:13:12 AM

Miners won't stop mining, there will always be many other options left, do you even know how many coins we have in crypto space that are running on POW Algorithm?

You can't mine litecoin or dash or a lot of other coins with sha256 Asics. The others with the same algorithm have only 4% of the rewards BTC mining offers. Besides, he is talking about the security of the chain, if the miners leave for some other coin, poof! there goes the security

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Quote from: awf1235 on July 01, 2020, 12:55:07 PM

Hello, I was wondering, what if reward will be so small that miners will stop mining because of future halvings it won't be profitable no more. Therefore transactions won't be proofed and then whole network will crash? Is it how it works? Huh

Miners won't stop mining, there will always be many other options left, do you even know how many coins we have in crypto space that are running on POW Algorithm? Ethereum is planning to switch to staking and many are worried about this, some think ethereum won't be that good anymore since there won't be any mining again but they are wrong, proof of stake sometimes are better

Hypnosis00

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The market still working well but not for the miners at this time. But have we thought how they suffered most during the first and 2nd halving? It probably more than struggles they in the 3rd halving.

To believe that the Bitcoin price will continue to increase in the next coming years. The 4th halving isn't yet set but I was thinking that the market price is already been double compared to 3rd halving that even halving will come, it doesn't give such struggles anymore but still profiting.

Quote from: Charles-Tim on July 01, 2020, 02:45:55 PM

Btc price before 2012 halving: $12
Price of btc before 2016 halving: $600
Price of btc before 2020 halving: $8900

Price of BTC for the next halving will be $20,000 Wink

(not possible)

OneGoLuck

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The bitcoin network adjusts its difficulty. If there is no other miners, then my old laptop is all that is needed to keep the bitcoin network alive, still finding blocks on average every 10 minutes. And there will always be at least one old machine mining.

There is a problem with having a very low difficulty though, and it is low security. Someone with more hashing power could do a 51% attack and steal coins.

But do not worry. As long as bitcoin has any value, the mining will continue.

MisterBitconio

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Quote from: awf1235 on July 01, 2020, 05:24:42 PM

i found something like this:

Quote

It may seem that the group of individuals most directly affected by the limit of the bitcoin supply will be the bitcoin miners themselves. On one hand, there are detractors of the protocol who say that miners will be forced away from the block rewards they receive for their work once the bitcoin supply has reached 21 million in circulation.

Without the incentive provided by a prize of bitcoin at the end of a rigorous and costly mining process, miners may not be driven to continue to support the network. This would have disastrous effects for bitcoin. Because mining is not just a process by which new tokens are introduced into the ecosystem, but it is first and foremost the way in which the decentralized blockchain is supported and maintained absent a central bank or other single authority, if miners abandon their work the network will likely move toward centralization or collapse entirely.

That's true, but won't happen. Tx fees will adjust for that lack of mining reward, and miners will net a good profit eventually. If not many are interested, profits will increase which will attract more miners. It's sort of an homeostasis system.

awf1235

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Quote from: MisterBitconio on July 01, 2020, 04:41:17 PM

Give Network Difficulty a look.
https://www.blockchain.com/charts/difficulty

As someone has said before, the more miners, the more difficult it is to mine a coin, the less the reward for each individual miner.
When miners disappear, the difficulty decreases (adjustment is every 2 weeks). In turn, it becomes easier to make money, which in an optimal market, will drive more people to mining.

If all bitcoins are mined and block mining rewards are at zero, miners' profits will come exclusively from transaction fees which will adjust according to the bitcoin value at the time of whenever that happens.

i found something like this:

Quote

It may seem that the group of individuals most directly affected by the limit of the bitcoin supply will be the bitcoin miners themselves. On one hand, there are detractors of the protocol who say that miners will be forced away from the block rewards they receive for their work once the bitcoin supply has reached 21 million in circulation.

Without the incentive provided by a prize of bitcoin at the end of a rigorous and costly mining process, miners may not be driven to continue to support the network. This would have disastrous effects for bitcoin. Because mining is not just a process by which new tokens are introduced into the ecosystem, but it is first and foremost the way in which the decentralized blockchain is supported and maintained absent a central bank or other single authority, if miners abandon their work the network will likely move toward centralization or collapse entirely.

MisterBitconio

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Give Network Difficulty a look.
https://www.blockchain.com/charts/difficulty

As someone has said before, the more miners, the more difficult it is to mine a coin, the less the reward for each individual miner.
When miners disappear, the difficulty decreases (adjustment is every 2 weeks). In turn, it becomes easier to make money, which in an optimal market, will drive more people to mining.

If all bitcoins are mined and block mining rewards are at zero, miners' profits will come exclusively from transaction fees which will adjust according to the bitcoin value at the time of whenever that happens.

Ryker1

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Quote from: awf1235 on July 01, 2020, 12:55:07 PM

Hello, I was wondering, what if reward will be so small that miners will stop mining because of future halvings it won't be profitable no more. Therefore transactions won't be proofed and then whole network will crash? Is it how it works? Huh

Well, if that will happen the reward will be so small to miners but for sure that small reward have a huge amount of value compared to the dollar. Because these miners will receive a bitcoin as a reward for completing verified transactions which added to the blockchain.
More transaction means the demand and supply will make bitcoin price growth and miners will not stop mining if everyone willing to pay higher fees just to have fast confirmation of bitcoin. Indeed, this is a circulation process, miners and bitcoin holders will have an equal balance.

Charles-Tim

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Quote from: Upgrade00 on July 01, 2020, 01:11:31 PM

I believe it's a system that is designed to balance itself out as the market grows and adapts. We had the third Bitcoin halving in May and just recently the largest number of miners in one purchase was made. This would reflect that despite the drop in mining reward companies still recognize a great potential in the industry and are willing to compete for dominance.

• Bitcoins previous halving happened on the 9th of July, 2016, when the coinbase dropped to 12.5BTC, the price of Bitcoin then was about ~$600.
• The most recent Bitcoin halving dropped it to 6.25BTC at a market price of about ~$9k.
This is a reflection of how the market can adjust to keep the system profitable. Miners also earn from fees paid on transactions.

In my opinion, you are right, the price of bitcoin will be the determinant. I liked the 2016 and 2020 halving examples you used, but I also remembered in November 2012 before halving, the price of bitcoin was around $12. So

Btc price before 2012 halving: $12
Price of btc before 2016 halving: $600
Price of btc before 2020 halving: $8900

So, like you said, the halving reward is reducing but bitcoin price is increasing which makes miners to be encouraged and mine bitcoin, 2020 has been the year of highest hashes generated by miners and possibly this may still continue to increase because:

More people are getting to know bitcoin and are buying it
Organizations are getting to adopt bitcoin, a good example is the human rights organization.
Even, countries are accepting it the more, recently you can pay in posts offices in Australia in bitcoin now and many more.

The way world are accepting bitcoin, the more the adoption, the more the increase in bitcoin price, if bitcoin price increase, miners will be encouraged, if miners are encouraged, more miners (mining machines) will be used, hashes generated by miners will increase to continually and sufficiently securing bitcoin blockchain.

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Quote from: awf1235 on July 01, 2020, 12:55:07 PM

Hello, I was wondering, what if reward will be so small that miners will stop mining because of future halvings it won't be profitable no more. Therefore transactions won't be proofed and then whole network will crash? Is it how it works? Huh

On the contrary I don't think miners will stop mining but mining would even be more advanced than what it is now I will resist the urge to tell you how
+You could have mined with your phone
+Or what Bitcoin halving has done to mining and miners -search it up-
But what am about is mining would be done with even more super machine than what miners use now, the competition will be more,

peterurb

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Satoshi was too smart and he made one of the best systems. When mining is not profitable for miners they will just shut down their machines and network will be temporarily slowed down, cause there will be fewer miners. But every 14 days is mining difficulty is changed so on average will be blocks mined every 10 minutes.

So you don't have to worry. The network will work, but sometimes slower and sometimes faster.

jackg

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https://bit.ly/387FXHi lightning theory

People pay a transaction fee on every transaction they send, miners would just rely more on this fee.

As mentioned the block reward will keep halving until it's below 0.01 btc (not sure of the exact number) but current cumulative transaction fees are 0.13BTC so the current average miners are paid would be 6.38 instead of the 6.25... .

Upgrade00

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I believe it's a system that is designed to balance itself out as the market grows and adapts. We had the third Bitcoin halving in May and just recently the largest number of miners in one purchase was made. This would reflect that despite the drop in mining reward companies still recognize a great potential in the industry and are willing to compete for dominance.

• Bitcoins previous halving happened on the 9th of July, 2016, when the coinbase dropped to 12.5BTC, the price of Bitcoin then was about ~$600.
• The most recent Bitcoin halving dropped it to 6.25BTC at a market price of about ~$9k.
This is a reflection of how the market can adjust to keep the system profitable. Miners also earn from fees paid on transactions.

awf1235

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Hello, I was wondering, what if reward will be so small that miners will stop mining because of future halvings it won't be profitable no more. Therefore transactions won't be proofed and then whole network will crash? Is it how it works? Huh

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