Topic: What happens when everyone just holds their bitcoin and theres few txs? (Read 232 times)
January 16, 2021, 07:58:12 AM
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January 08, 2021, 02:42:50 AM
So according to the graph (at bottom of this post) the exchanges barely have any bitcoin left since large holders bought them all up and put them in cold storage where they wont move them. Michael Saylor talked of holding for 100 years.
Your read the chart wrong. There's still more than 2 million BTC sitting on exchanges. And just because coins are leaving, doesn't mean that they can't return. Last year, we have witnessed some sudden and huge inflows of coins to exchanges and they were followed by big price drops.
But anyway, if transactions drop by alot and barely anyone still moves their bitcoin around, would this have an effect on miners?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
Why would transaction count drop? People use Bitcoin for more than just speculating on the market, believe it or not. And as long as there are coinbase rewards, there's nothing to worry about. We still have some decades before we could start observing potential effects of low coinbase rewards on mining industry and hashrate.
January 08, 2021, 02:39:30 AM
This can actually be seen as some unplanned attack on Bitcoin, if they operate like this for a long time. (The PayPal CEO said, their business model might change in the future, but we will have to wait and see if that will happen or not)
Interesting as EBay announced this week that no more EBay payment transactions will run through PayPal -- my estimate is this will be a significant impact on PayPal. Additionally EBay is requiring tax info to send to the IRS for every sell transaction someone makes on EBay for selling and tax purposes. Eek.
January 08, 2021, 01:46:54 AM
If everyone HODLs BTC and yet there is still demand for BTC,the Bitcoin price will hit the moon.
Which means that the BTC block rewards are more than enough for the BTC miners to maintain sufficient profits.
The theory of everyone suddenly HODLing their BTC will remain just a theory.In reality,many traders won't resist the pressure of HODLing their BTC in a volatile market,so they will start selling,sooner or later.
Which means that the BTC block rewards are more than enough for the BTC miners to maintain sufficient profits.
The theory of everyone suddenly HODLing their BTC will remain just a theory.In reality,many traders won't resist the pressure of HODLing their BTC in a volatile market,so they will start selling,sooner or later.
January 08, 2021, 12:13:39 AM
...If transaction fees are not that important for miners, might as well consider having like $1 or less for a transaction so you could actually buy a cup of coffee in real life or a meal, which at $5 transaction fee makes no sense.
Are you suggesting that miners set a cap for transaction fees like $1? That won't do. It's not their problem if some users wants to pay more.I think it's time to start looking at fees in sats. When bitcoin's price in USD soars to six digits, even a 1 sat/vbyte would appear high if you look at it in fiat value. Would you want a 0.1 sats/vbyte if that happens?
....
Now the fee isnt exactly cheap however much lower than 2017 AND very low fees still go
thru.
It's only cheaper in fiat value since price in USD increased. Fees are pretty much the same in sats even in 2017. Now the fee isnt exactly cheap however much lower than 2017 AND very low fees still go
thru.
January 07, 2021, 11:54:24 PM
What happens if noone actually uses bitcoin for anything is that it will die off eventually.
Thats an interesting point. It seems last bullrun 2017 there was much more tx than now
and fees went up really high and low fee tx would not get confirmed.
Now the fee isnt exactly cheap however much lower than 2017 AND very low fees still go
thru.
Hinting at much less txs unless theres other factors.
There will still be alot of transactions of course and alot of uses even just from trading
or sending larger amounts.
Besides from that maybe we should bring more new projects that make use of bitcoin
January 05, 2021, 06:44:26 AM
What happens if noone actually uses bitcoin for anything is that it will die off eventually.
January 05, 2021, 06:42:10 AM
Thanks everyone for the replies.
If transaction fees are not that important for miners, might as well consider having like $1 or less for a transaction so you could actually buy a cup of coffee in real life or a meal, which at $5 transaction fee makes no sense.
If transaction fees are not that important for miners, might as well consider having like $1 or less for a transaction so you could actually buy a cup of coffee in real life or a meal, which at $5 transaction fee makes no sense.
January 05, 2021, 05:20:51 AM
The fees per block appears to vary quite wildly, from about 0.5BTC to about 1BTC. If I had to guess, miners are primarily concerned about the block rewards and aren't exactly considering the transaction fees together with it since it can be so volatile.
Bitcoin's primary purpose is to act as a currency for transaction and it isn't supposed to be like the speculative assets which are meant to be held for long periods of time. While some people do treat it like that, it does nothing to help to promote Bitcoin as a currency of the future. If everyone stop transacting Bitcoin, the value of Bitcoin will certainly crash.
Bitcoin's primary purpose is to act as a currency for transaction and it isn't supposed to be like the speculative assets which are meant to be held for long periods of time. While some people do treat it like that, it does nothing to help to promote Bitcoin as a currency of the future. If everyone stop transacting Bitcoin, the value of Bitcoin will certainly crash.
Totally agree. It is a wise thing to do Bitcoin holding. As the supply will decrease over time, it may cause the price to rise excessively. But later, investors holding it for a long time (which I don't think they will do) can create the opposite effect and cause the cryptocurrency to become devalued.
January 05, 2021, 05:06:26 AM
Interesting observation ....because companies like PayPal are not actually trading the bitcoins you buy and sell... they use a internal ledger system to track the ownership of the coins they hold. So those transactions are not done on the Blockchain and no miners fees are paid to the miners.
This can actually be seen as some unplanned attack on Bitcoin, if they operate like this for a long time. (The PayPal CEO said, their business model might change in the future, but we will have to wait and see if that will happen or not)
This can actually be seen as some unplanned attack on Bitcoin, if they operate like this for a long time. (The PayPal CEO said, their business model might change in the future, but we will have to wait and see if that will happen or not)
January 05, 2021, 04:37:43 AM
Seems demand, supply and transactions work hand in hand. If demand and supply is low or nonextent, a coin is probably not very useful to users, transactions will be low as well and price/value will be low.
So whales or other holders would be holding because Bitcoin is very useful/valuable and that will translate to increased transactions and higher price/value.
So whales or other holders would be holding because Bitcoin is very useful/valuable and that will translate to increased transactions and higher price/value.
January 05, 2021, 03:27:30 AM
That will change quickly due to the shape of Bitcoin's supply curve. How about after three more halvings, when the miner subsidy is only 0.78125 BTC?
Even today, 0.5-1 BTC is 8-16% of the subsidy. That's a significant chunk of revenue in an increasingly competitive business. I would think that miners care quite a lot about fees at this point.
The mining landscape would be completely different then. I don't think all of the miners considers the fees as their main source of revenue and they should primarily be focusing on the block rewards. Of course, as the mining rewards diminishes, more and more miners has to consider the fees as their main source of profits. That will definitely change, no doubt.Even today, 0.5-1 BTC is 8-16% of the subsidy. That's a significant chunk of revenue in an increasingly competitive business. I would think that miners care quite a lot about fees at this point.
If no one spends Bitcoins, I bet the fees market isn't the main thing the miners would be concerned about. The price of Bitcoin will be, as it has evidently lost it's utility as a currency.
January 05, 2021, 03:21:44 AM
The fees per block appears to vary quite wildly, from about 0.5BTC to about 1BTC. If I had to guess, miners are primarily concerned about the block rewards and aren't exactly considering the transaction fees together with it since it can be so volatile.
That will change quickly due to the shape of Bitcoin's supply curve. How about after three more halvings, when the miner subsidy is only 0.78125 BTC?
Even today, 0.5-1 BTC is 8-16% of the subsidy. That's a significant chunk of revenue in an increasingly competitive business. I would think that miners care quite a lot about fees at this point.
Bitcoin's primary purpose is to act as a currency for transaction and it isn't supposed to be like the speculative assets which are meant to be held for long periods of time. While some people do treat it like that, it does nothing to help to promote Bitcoin as a currency of the future. If everyone stop transacting Bitcoin, the value of Bitcoin will certainly crash.
I agree -- there needs to be a minimum level of transaction activity for Bitcoin to have value. I don't believe that hoarders are the downfall of the network, however. Fee revenue is determined by demand for limited block space, not the number of liquid bitcoins on the network. I have a hard time believing the entire network will ever just collectively refuse to spend, especially as society enters a future where people are becoming increasingly skeptical of fiat money. Bitcoin may become crucial for settling very large accounts (B2B, governments) and that may end up being the backbone of mining fee revenue.
January 05, 2021, 03:16:55 AM
But anyway, if transactions drop by alot and barely anyone still moves their bitcoin around, would this have an effect on miners?
For the next few years, no, see the other posts.
For very long term yes. But Bitcoin is meant to be a coin, something people use; even if 80% of the coins "in circulation" are actually locked in wallets, even the rest can make plenty of transactions; keep in mind that there's not much of a difference if one sends 10 BTC or 10 mBTC in a transaction (for the miners and fees).
Also, if there will be problems and mining will not be profitable, some miners will give up causing the difficulty drop and make it again profitable for the rest (that's if people and companies also stop buying ASISs like mad).
For now it's profitable, you should not worry for the miners.
January 05, 2021, 01:18:22 AM
Quote
But anyway, if transactions drop by alot and barely anyone still moves their bitcoin around, would this have an effect on miners?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
Miners are more concerned about mining rewards rather than transaction fees! As Ranochigo mentions, it varies unlike the block reward. So practically it doesn't make sense for miners to look at the transaction fees and hence they will not be impacted to a severe degree if transaction fees dries out!
Also in a time like this, it is an expected behavior of the investors and early adopters! Especially when the institutional investors have poured in millions of dollars into the market. So this current bull run is less of FOMO but more about positivity and extended liquidity. So miners are more joyful about the increased price rather than shrinking transaction fees, I presume!
January 04, 2021, 10:28:34 PM
As ranochigo pointed out, the fee reward represents only 5%-10% of the mining reward, as most of the remainder is made up of block reward (BTC6.25 at this point). So I don't think that the miners are that much adversely impacted. It may be an issue after a decade or so, when the block reward drops below BTC1.00. But right now I don't think that anyone needs to lose their sleep over it.
January 04, 2021, 10:15:43 PM
The fees per block appears to vary quite wildly, from about 0.5BTC to about 1BTC. If I had to guess, miners are primarily concerned about the block rewards and aren't exactly considering the transaction fees together with it since it can be so volatile.
Bitcoin's primary purpose is to act as a currency for transaction and it isn't supposed to be like the speculative assets which are meant to be held for long periods of time. While some people do treat it like that, it does nothing to help to promote Bitcoin as a currency of the future. If everyone stop transacting Bitcoin, the value of Bitcoin will certainly crash.
Bitcoin's primary purpose is to act as a currency for transaction and it isn't supposed to be like the speculative assets which are meant to be held for long periods of time. While some people do treat it like that, it does nothing to help to promote Bitcoin as a currency of the future. If everyone stop transacting Bitcoin, the value of Bitcoin will certainly crash.
January 04, 2021, 09:45:11 PM
So according to the graph (at bottom of this post) the exchanges barely have any bitcoin left since large holders bought them all up and put them in cold storage where they wont move them. Michael Saylor talked of holding for 100 years.
Plus probably alot on Paypal US now where people will eventually move them of course.
But anyway, if transactions drop by alot and barely anyone still moves their bitcoin around, would this have an effect on miners?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
Plus probably alot on Paypal US now where people will eventually move them of course.
But anyway, if transactions drop by alot and barely anyone still moves their bitcoin around, would this have an effect on miners?
On transaction fees? If miners cant get alot of transaction fees will this have an effect on them, or does the rise of the price and their mined bitcoin compenate for it?
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