Topic: On bitcoin's very long term future without miner rewards - page 2. (Read 945 times)

There is no benefit.

There are two problems with this idea. First is the fact that you are talking about altcoins and we can not rely on altcoins to even exist after a certain time let alone have enough value to be worth (merge)mining. Second is the fact that no proper cryptocurrency would ever rely on another cryptocurrency for its existence. They will always aim to be stand alone. The "parasitic altcoins" are always low quality useless ones.

That I could agree with. We need to reach a good balance where fees don't go high to unreasonable levels while making sure they don't fall down to zero either and at the same time ensure decentralized nature of bitcoin.

Bitcoin is not a bank, there is no account, there is no frozen account/coins.
And nobody should ever have the power to move someone else's coins just because they weren't moved in X number of days/years.

interesting idea, but it sounds controversial and unlikely to gain consensus. lots of bitcoin users expressed dismay at the idea of burning unmoved coins in a hypothetical transition to a post-quantum signature algorithm: https://www.reddit.com/r/Bitcoin/comments/4isxjr/petition_to_protect_satoshis_coins/d30we6f/

this occurs to me as the same ethical dilemma---whether to deprive people of their coins in an effort to secure the system. it would be like charging a form of demurrage that users never agreed to in the first place.

There are millions of frozen coins.

As time marches on I believe the old frozen coins will be lifted from inactive accounts.

2024  =  3.125
2028  =  1.5625
2032  =  0.78125
2036  =  0.390625
2040  =  0.1953125
2044  =  0.09765625
2048  =  0.048828125


I think there could be a call to unlock the 2009 frozen accounts in 2039 or later.

the 21mill are still intact. Just recycle the frozen ones.

Many banks remove stale accounts with notice.  If they do this the issue leaves. For a long time.

you can't just extrapolate into the future since the current primary component of the block reward (inflation) won't be there in the future. we can argue about how to properly account for that, but to assume the current price/hash rate dynamics will continue indefinitely as inflation is phased out---that's just not reasonable to me.


i'm not confident in that assumption. we need a deeper theoretical analysis of fee market dynamics before we can assume that. without fee pressure from restricted block size, fee revenue drops exponentially---that's all i know.

I presented this as a possible scenario of the distant future in which the Bitcoin security problem turns out to be purely academic.

As of today, merged mining is not relevant, obviously (maybe except for those responsible for running large mining pools).

It looks like those coins combined account for less than 0.1% of Bitcoin's daily issuance, and thus have negligible contribution to Bitcoin security.

The amount of miners income from transaction fees is already quite high...
But the level of this income is quite variable, one might be concerned about whether this could form the basis of Bitcoin's security in the future.

However, there a factor that is usually completely overlooked in such discussions: merged mining (Satoshi's idea).
Merged mining is currently in use, with Elastos (main chain and PoW sidechains), Namecoin, Syscoin and a bunch of other coins.

As a rule, none of these coins compete with Bitcoin due to slightly lower (and Bitcoin dependent, of course) decentralization and security.

But aren't they great for contributing to Bitcoin's security in the future?

Merged mining seems to have growth potential.
Especially if someone understands the limitations of securing a coin only with a proof of stake.

The mining reward will go down gradually, which is good, and the price should keep rising significantly over the next few halvings, allowing the falling mining reward to still offer a lot of $$. This will keep mining profit viable for a long time even when mining reward gets pretty small. But say by 2044, when the mining reward is less than 0.1 BTC, even if the price is $2 million (which it might reasonably be by then, but it might not), that reward is going to be less than it is now. Since the price by that time will be doing nothing close to doubling every four years, as Bitcoin will have long since matured into a slower growing more stable market, we run into a problem. And that problem will only get worse by a century later when price won't even matter because there will be no mining reward beyond tx fees.

Increasing the supply cap is not an option. Period. That will never happen. But of course there is a far more practical solution: increase the block size. The only reason to keep the block size stuck at its small size is to make it easier for people with slower internet to mine by not having to propagate large amounts of bytes around the network, and the worry this would hurt decentralization and therefore security. Storage is less a concern because storage gets cheap at a quick rate. Obviously by now network speeds have already increased since Bitcoin launched, and even then the block size limit was likely pretty conservative. It is entirely reasonable to say by like 2040 we could 10x the block size, letting in 10x as much tx fee to go to miners, not hurt decentralization at all, and allow more actual real world usage of bitcoin, 10-fold as much usage. And it is certainly reasonable to think that by 2140 we could 10x block size again (if not 100x it) to allow mining to be well worth it given tx fees, keep fees low, allow much more usage of Bitcoin.

Increasing block size is the only long term solution to the diminishing mining rewards. It would have been nice if this had been dealt with in 2017 when there was all the controversy over scaling upgrades, and before Bitcoin really achieved the global relevancy that it is on the verge of staring to get today, but instead all we got was a measly ~2x segwit upgrade. At some point Bitcoin developers will have to take this seriously and hard fork to a more future proof Bitcoin network that allows many times more transactions in order to keep mining profitable. The best way would just be too include a blocksize modifier that gets that gets activated in parallel with each halvening, so that every four years as block reward goes down tx fee reward goes up from more room from transactions, plus you only ever have to do one hard fork for this instead of multiple. So far there has been a complete failure from the community to seriously address this problem. It's just been religious-like bullshit between "small blockers" and "large blockers" which is just stupid.

Again we can not predict the future but only see the past so far and extrapolate. There has never been any effects of falling block subsidy and it has gone from 50 all the way down to 6.25 (-87%) while the price and revenue has grown significantly more (380million%).

I have also disagreed with saying block size has to be restricted to force the fees to increase. The "fee revenue" doesn't have to be from the same number of transactions, it can be increased by taking it from more number of transactions (aka increasing capacity).

Not as much as you might think.
Both the cost of a 51% attack and the possible double spending gains scale linearly with Bitcoin price.
Security is about the mining reward being a sufficiently high fraction of circulating supply.

There is a glimpse of hope that by the time we get to that phase, the market would've matured enough such that huge price movements would be less common. It would also signify that miners are just having a thin profit margin and shutting down the bulk of their equipment would be more worth than just keeping it running to earn a marginal profit.

I see block rewards as a way to distribute the coins but as the block subsidy decreases, the adoption rate would've increased. Currently, the main offchain scaling solution is LN. If the only time the on-chain transactions are needed is to open and close the channel, I would think that the total on-chain fees would increase while still having the same or even more utility.

For the fees to completely replace block rewards, assuming current levels should bring the fees about x6 more expensive and/or x6 increase in transactions/block. I would think that given time, the problem could be resolved. There is still a few years until block rewards would form a big bulk of the miner's profit.

it doesn't seem optimal to depend wholly on price, as is the case with the large block size/low fee revenue model. as block rewards drop and drop, miners will become increasingly sensitive to price changes, potentially leading to large swings in hash rate.

to prevent that, fee revenue must rise to dampen the effect of the falling block subsidy. that means restricting block size, probably rather conservatively.


this is the early adopter phase when the block subsidy is still relatively high. how about in......12 years or 16 years? then the issue of block size will be extremely important because fees will be the primary source of mining income.

The quote was talking about 2030 so it was more of the short-long-term. And the post-subsidy is not for about 100 years, I find it kind of moot to discuss it now since we simply can't know how anything would be in 2100 for instance!

Price only matters as long as there is a subsidy. I assume that when we talk about long-term, we are talking about post-subsidy.

Actually the more important question is not about any of that, it is all about the price of bitcoin. Saying block reward won't be enough to secure the network is actually saying that bitcoin price is not going to be high enough (or would drop hard) to ensure hashrate remains high enough to make attacks impossible due to extremely high costs.

So far we have no reason to believe that. With 50BTC per block reward miners were making less than a dollar. Last cycle when they were making 12.5BTC per block that was between $8k to $75k and today it is $230k for only 6.25BTC per block.
You see bitcoin doesn't even need the fees to keep the incentive so much higher than needed for security, not only that but also this won't change any time soon.

This means even if we cut the reward by half today to 3.125BTC (instead of in a couple of years when price could be a lot higher than now) the miners would still be making $115k which is a lot higher than what they were making when the reward was 12.5BTC.

What do you mean by "sustainable"? How do you determine what is sustainable, and how do you know that fees won't provide it?


Why would there be a split? I don't think there is enough information to justify either side at this point, and it might become clear which way is better as more information is gained. For now, your prediction is based on nothing.

I think that there are two major questions left to answer:

1. What is the optimal maximum block size?
2. Will fees alone be enough to secure Bitcoin?

I don't think that anyone knows the answers to those questions yet.

Regarding the optimal block size, I think that there needs to be a way to incentivize miners to reach an equilibrium. Technocrats dictating a policy is the absolute worst way to approach it. An unlimited block size might be the answer, but I suspect that it would not as it would turn into tragedy-of-the-commons problem.

Regarding security through fees alone, there is no way to know if fees are enough without knowing what amount of fees are necessary to secure the block chain, how much people will be willing to pay, and how big the blocks will be.

The block reward concerns all feel high up in the air for most people. That is, until the we reach a specific period where the rewards are so abysmally low compared to the value being moved on chain, that transaction finality actually becomes a material concern - this will be unfamiliar and frightening for many, undoubtedly causing disunity.

I sincerely believe we can anticipate a chain-split revolving around this issue come early/mid 2030's; One side would stick to the supply cap and the other side would eliminate all remaining halvings, in effect creating a tail emission of 0.78 or 0.39 per block. It is practically going to be a battle of whether intermediary tools should provide transaction finality, or the chain it self.

I think it's undisputed that its scarcity is part of Bitcoin's success. Personally I feel that trailing emission is definitely worth discussing as an alternative monetary policy (in the context of alts). But without Bitcoin gaining traction due to its limited supply, causing a Cambrian explosion of alts, we'd never reach the point where we could discuss this issue in a practical sense in the first place.

Actually I'd even go as far as to say that the abrupt supply shocks caused by the halvings are part of the plan. An asset affected by sudden surges is more likely to gain attention than one that's constantly growing. And the four years between halvings seem to be just enough time that people can recuperate after a crash without Bitcoin being completely lost out of public view, making it the perfect FOMO trigger.

  i think Satoshi made a time-adjusted self destruction design here.İntentionally He put a limit to cap supply becuz he knew the mentality of money flows in this 0-negative rates area,printed trillio dollars,euros.. A small part of this money will be located a scarce supplied financial instrument, higher demand than supply..So it will gain popularity and adoption with this rapid Price increase until no one can denies the existence.A 600 billion mcap monster.

 Admit it,none of us,mostly wont be get involved in the idea or tech if Bitcoin didnt accelerate price with limited cap. Miner and asic firms wont invest if it was stayed low priced.We are all price and profit oriented,we want to beat inflation and censorship. Yet,VC,Miners,Asic firms,and you..already discussing,thinking. 21 million +%3 inflation or %5 inflation ,blocksize etc.


  Miners and everybody needs rewards. 1.5 million left coins. it is time detonated. Satoshi knew it and trapped the whole financial system.Bitcoin is an only spearhead.

  Real hard money is Gold. Still living at the every dark corner of the world.

  An unlimited supply,miner rewards for thousand centuries. Still inflated but less.İmmense liquidity.Perfect design tested for 1000 years.İmmortal.

  Bitcoin is monetary policy  immutable,which makes it Bitcoin. There is nothing you can do. When you change it, you are like ecb,fed,boj.And if stays 21 million this way again it dies slowly.