What happens when the coins dry up? - page 3.

Stephen Gornick

legendary

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This same question has been getting asked quite a bit lately:

Transaction fees will need to replace the currency issuance in the block reward.

Quote

When operating costs can't be covered by the block creation bounty, which will happen some time before the total amount of BTC is reached, miners will earn some profit from transaction fees. However unlike the block reward, there is no coupling between transaction fees and the need for security, so there is less of a guarantee that the amount of mining being performed will be sufficient to maintain the network's security.

- http://en.bitcoin.it/wiki/Myths#After_21_million_coins_are_mined.2C_no_one_will_generate_new_blocks

- https://bitcointalksearch.org/topic/what-happens-when-all-bitcoins-are-mined-71176
- https://bitcointalksearch.org/topic/who-secures-the-network-once-all-bitcoins-have-been-mined-75138

Meni Rosenfeld

donator

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Quote from: 1l1l11ll1l on April 10, 2012, 12:28:35 AM

OR will there still be rewards for hasing? Such as the transaction fees being distributed?

Yes, miners receive transaction fees in addition to the new coins being minted. As cunicula points out, there are doubts that transaction fees alone will be enough in the current system.

legolouman

hero member

Activity: 504

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Decent Programmer to boot!

Quote from: 1l1l11ll1l on April 10, 2012, 12:28:35 AM

Been wondering. What happens when all the coins have been released? Does everyone just stop mining? Would that leave just people who want to contribute to the cause hashing to verify transactions? That seems like it would make it quite easy for someone to gather a modest amount of hardware and hit that 51% mark.

OR will there still be rewards for hasing? Such as the transaction fees being distributed?

The hope is that transactions are enough of an incentive to keep the network happy. Currently, it wouldn't be, and that is proven by the fact that 1/3 of the blocks are purposely mined empty, to increase profitability.

cunicula

legendary

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Quote from: 1l1l11ll1l on April 10, 2012, 12:28:35 AM

Been wondering. What happens when all the coins have been released? Does everyone just stop mining? Would that leave just people who want to contribute to the cause hashing to verify transactions? That seems like it would make it quite easy for someone to gather a modest amount of hardware and hit that 51% mark.

OR will there still be rewards for hasing? Such as the transaction fees being distributed?

Yes, bitcoin will get killed by attacks or alternatively by high fees when this happens unless the protocol is changed. Actually, death due to decreasing rewards will likely happen much sooner than when rewards drop to zero. Even with the current maximal reward we are already getting botnets and lone individuals who aspire or have some share of hashing power in the 10-30% range. This is known as the tragedy of the commons problem. Proof-of-stake is the solution.

https://en.bitcoin.it/wiki/Proof_of_Stake

Note that there is a strong desire among many of the bitcoin community to wish this problem away. Demand a logical argument providing an answer to your question. Don't let them get away with hand-waving.

Ask what will happen to txn fees as well. Will the network be secure? Will txn fees be competitive with paypal? In my view, the current protocol can potentially give a yes answer to only one out of two of these questions (that is pick one). It is impossible to obtain yes answers to both under the current protocol.

1l1l11ll1l

legendary

Activity: 1274

Merit: 1000

Been wondering. What happens when all the coins have been released? Does everyone just stop mining? Would that leave just people who want to contribute to the cause hashing to verify transactions? That seems like it would make it quite easy for someone to gather a modest amount of hardware and hit that 51% mark.

OR will there still be rewards for hasing? Such as the transaction fees being distributed?

Topic: What happens when the coins dry up? - page 3. (Read 7680 times)