What if the fees aren't enough? | Bitcointalksearch.org

Abiky

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Quote from: Flexystar on June 20, 2022, 09:01:43 PM

They won't turn off the machines because that's still profitable for them as they are mining since inception of bitcoin and some of them are mining since the middle age of bitcoin. They have already gotten their ROI so far and all they earning is huge loads of profits. If anything they are troubled with right now is to acquire new machines, new investments just to increase their income!

I believe they are not loosing anything as long as they are mining and keeping the coins as it is.

This is only troublesome to those who are going to do new set up. Their ROI's would be high period, may be more than double as compared to what it was last year.

Early miners will still mine Bitcoin as they've got nothing to lose. But new ones will likely be scared off, due to the unprofitable nature of the cryptocurrency. That is assuming Bitcoin's price stalls or goes lower than what it is right now. Past market performances have shown us that Bitcoin always goes up, so it's likely Bitcoin will be extremely valuable by the time all of the coins have been mined. This means miners will be earning transaction fees at a very profitable rate. Both you and I won't live by that time (2100), so there's no reason to be worried about miners leaving off the Blockchain anytime soon. Just my opinion

dansus021

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Quote from: ChrisPop on June 20, 2022, 11:56:53 AM

Let's break it down really simple, ok?

Bitcoin halving takes place --> block rewards halve --> miners' block rewards decrease (BTC nominated), but their total rewards is computed from both block rewards and fees

If the total mining rewards do not cover operational expenses they are likely to cease operations --> less miners on the market --> lower difficulty --> more efficient miners enter the market leading to increased difficulty afterwards

this is actually simple and very easy to understand and yes it will round circle like that

till this date, as far as i know there is never miner get less fee unless they are using unefficient miner hardware, the wallet always adjusted how much price you to pay to get the confirmed, if we pay less fee then offcoure less we can get the confirmed transaction

Flexystar

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Quote from: LongTimeAgo on May 03, 2022, 07:43:48 PM

I know its heresy but I'd really like to entertain a discussion on both sides regarding a concern of mine. What if transaction fees aren't enough to incentivize the miners to secure the bitcoin network? I think this is a potential problem we may see in the next few decades as the halving continues on. My hope is that we will have enough people using the bitcoin network to have a healthy fee market, but if we have weak periods like now where there are several unfilled blocks, wont miners just turn off their equipment as they are unprofitable? What options or solutions are being discussed to help mitigate this?

They won't turn off the machines because that's still profitable for them as they are mining since inception of bitcoin and some of them are mining since the middle age of bitcoin. They have already gotten their ROI so far and all they earning is huge loads of profits. If anything they are troubled with right now is to acquire new machines, new investments just to increase their income!

I believe they are not loosing anything as long as they are mining and keeping the coins as it is.

This is only troublesome to those who are going to do new set up. Their ROI's would be high period, may be more than double as compared to what it was last year.

ChrisPop

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Let's break it down really simple, ok?

Bitcoin halving takes place --> block rewards halve --> miners' block rewards decrease (BTC nominated), but their total rewards is computed from both block rewards and fees

If the total mining rewards do not cover operational expenses they are likely to cease operations --> less miners on the market --> lower difficulty --> more efficient miners enter the market leading to increased difficulty afterwards

The concern is whether mining rewards will become so low that decentralization will be affected or there will be no miners left on the network. The second concern is offset by the above logic (difficulty adjusts itself). Regarding the first concern, thank God we have active Bitcoin communities around the world who support this network. Moreover big mining farms do not have any incentive to become so big that they damage the security of the network. What would Bitcoin be worth without its security features?

odolvlobo

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Quote from: jostorres on June 20, 2022, 08:55:38 AM

Quote from: odolvlobo on June 18, 2022, 04:55:54 PM

People were mining bitcoins when the block reward was worth less than $50. There is no reason to believe that the price must increase in order for mining to continue.

I do not mean that, I meant that if the reward is nowhere to be found, and people are making low amounts, then we won't have this miners, it will be a lot slower. What I mean by that is the fact that we have huge factories full of asic miners and so much hash rate right now, all those "even when rewards were under 50 bucks" happened when the hashrate was much lower, and not when we had huge factories of asic farms.

This means that we are at a level where it would not be really profitable for people to keep on mining if there is no profit for those farms, hence it will be like GPU miners for ETH and the hash rate will fall and we will not have the same hashrate and security, that's all.

I agree that if the value of the block reward drops, then the security against 51% attack will also be reduced because the block reward determines the level of security. The real question is what is the minimum necessary level of security.

However, because of the difficulty adjustment, mining will always be profitable for some miners and blocks will always be every ten minutes. There is no issue of mining stopping completely.

jostorres

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Quote from: odolvlobo on June 18, 2022, 04:55:54 PM

People were mining bitcoins when the block reward was worth less than $50. There is no reason to believe that the price must increase in order for mining to continue.

I do not mean that, I meant that if the reward is nowhere to be found, and people are making low amounts, then we won't have this miners, it will be a lot slower. What I mean by that is the fact that we have huge factories full of asic miners and so much hash rate right now, all those "even when rewards were under 50 bucks" happened when the hashrate was much lower, and not when we had huge factories of asic farms.

This means that we are at a level where it would not be really profitable for people to keep on mining if there is no profit for those farms, hence it will be like GPU miners for ETH and the hash rate will fall and we will not have the same hashrate and security, that's all.

odolvlobo

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Quote from: Abiky on June 19, 2022, 07:55:01 PM

Of course. If market prices are too low, then you can bet miners will leave the network faster than you can imagine. Only a high-valued BTC, will sustain miners' operations for the long haul.

So, how do you explain miners in 2010 when a bitcoin was worth less than $1, and the block reward was worth less than $50?

If the price drops then some miners will certainly stop, but the ones that remain will continue to mine at a profit because of the difficulty adjustment.

Abiky

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Quote from: odolvlobo on June 18, 2022, 11:51:09 PM

I agree. The security against a 51% attack is basically determined by the value of the block reward.

OTOH, @jostorres is asserting that mining will stop altogether if the value of the block reward does not remain high, and I disagree.

Of course. If market prices are too low, then you can bet miners will leave the network faster than you can imagine. Only a high-valued BTC, will sustain miners' operations for the long haul. With Bitcoin's past performance, it's likely it'll have a much higher price by the time all of the coins are mined. If that happens, miners will still be able to live off solely on network fees. No one can predict the future, so we can only hope for the best. At least, we don't need to worry about miners leaving the Blockchain during our lifetimes. Just my thoughts Grin

Captain Corporate

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"Stop" is a big word, it means like ALL miners would stop? Why would they, there would be plenty of profit to make at all times no matter when we are talking about, even after 21 million was mined. However, if we are talking about not having such a big sector? That could be true, maybe there will be a lot less people or a lot less business around this. So "stop" is a bit wrong, its more about "it will not be as profitable as it is, but there will still be some people" and I would agree with that. Same goes for many other things, whatever is hyped for a while, will always go down, will not be zero, but will be a lot less prefered.

Ebede

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Quote from: CryptoHeadlineNews on June 17, 2022, 02:20:35 AM

I am sure there will definitely always be a way out when the time comes, because over 99% Bitcoin has already been mined, and if mining will continue there will always be a way miners will be compensated for running a ring with electricity, because i know electricity bill in mosy countries are quite expensive. So it has to be profitable to get people into it

Nothing will make miners to stop in cryptocurrency because and bitcoin in that matters because bitcoin always have it supporters and if miners of cryptocurrency is not active to miners cryptocurrency, that means Bitcoin will just die off without any way of rising.so minutes will never stop mining Bitcoin

odolvlobo

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Quote from: hZti on June 18, 2022, 04:59:47 PM

Quote from: odolvlobo on June 18, 2022, 04:55:54 PM

Quote from: jostorres on June 18, 2022, 02:08:08 PM

...
So, if the price is 20k even at that point, and there are only 20k left for the next 5 decades at some point, then it means that mining is already dead, people would mine only for the fee at that point. So that means price needs to go up insanely high in order to make it still valuable in the future, even 1 bitcoin needs to be 1+ million dollars to get them go on. Otherwise we will not see anyone mining anymore.

People were mining bitcoins when the block reward was worth less than $50. There is no reason to believe that the price must increase in order for mining to continue.

The difference back then was that also the whole network was worth nothing. Now you have billions of dollars stored in the network, which makes an attack more likely. So we need enough miners to prevent such an attack.

I agree. The security against a 51% attack is basically determined by the value of the block reward.

OTOH, @jostorres is asserting that mining will stop altogether if the value of the block reward does not remain high, and I disagree.

hZti

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Quote from: odolvlobo on June 18, 2022, 04:55:54 PM

Quote from: jostorres on June 18, 2022, 02:08:08 PM

The sad thing is, you or I may not see the last bitcoin mined technically speaking, but we have already seen majority of it mined already, and by the time we are old, there won't be many left. By this way, if we live to a point where only 200k left, or 20k left who knows? Then the price needs to be high for that to matter.

So, if the price is 20k even at that point, and there are only 20k left for the next 5 decades at some point, then it means that mining is already dead, people would mine only for the fee at that point. So that means price needs to go up insanely high in order to make it still valuable in the future, even 1 bitcoin needs to be 1+ million dollars to get them go on. Otherwise we will not see anyone mining anymore.

People were mining bitcoins when the block reward was worth less than $50. There is no reason to believe that the price must increase in order for mining to continue.

The difference back then was that also the whole network was worth nothing. Now you have billions of dollars stored in the network, which makes an attack more likely. So we need enough miners to prevent such an attack.

odolvlobo

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Quote from: jostorres on June 18, 2022, 02:08:08 PM

The sad thing is, you or I may not see the last bitcoin mined technically speaking, but we have already seen majority of it mined already, and by the time we are old, there won't be many left. By this way, if we live to a point where only 200k left, or 20k left who knows? Then the price needs to be high for that to matter.

So, if the price is 20k even at that point, and there are only 20k left for the next 5 decades at some point, then it means that mining is already dead, people would mine only for the fee at that point. So that means price needs to go up insanely high in order to make it still valuable in the future, even 1 bitcoin needs to be 1+ million dollars to get them go on. Otherwise we will not see anyone mining anymore.

People were mining bitcoins when the block reward was worth less than $50. There is no reason to believe that the price must increase in order for mining to continue.

jostorres

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Quote from: Abiky on May 11, 2022, 12:45:40 PM

Neither you and I will live to the point where all of the Bitcoins have been mined. By that time, it's expected Bitcoin's price relative to Fiat to be much higher than what it is right now. It'll probably be in the millions of dollars (USD), allowing miners to profit solely from network fees. That is if we base ourselves in the rules of supply and demand. Considering that Bitcoin is a deflationary cryptocurrency, it has a higher chance of reaching astronomical prices in the future than any other coin being traded on the market today.

If network fees won't be enough to sustain miners' operations, the community can simply create a new fork with a higher supply and a new block reward or modifying the existing blockchain's parameters. No one knows what will happen in the future, so we can only hope for the best. Just my thoughts Grin

The sad thing is, you or I may not see the last bitcoin mined technically speaking, but we have already seen majority of it mined already, and by the time we are old, there won't be many left. By this way, if we live to a point where only 200k left, or 20k left who knows? Then the price needs to be high for that to matter.

So, if the price is 20k even at that point, and there are only 20k left for the next 5 decades at some point, then it means that mining is already dead, people would mine only for the fee at that point. So that means price needs to go up insanely high in order to make it still valuable in the future, even 1 bitcoin needs to be 1+ million dollars to get them go on. Otherwise we will not see anyone mining anymore.

CryptoHeadlineNews

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I am sure there will definitely always be a way out when the time comes, because over 99% Bitcoin has already been mined, and if mining will continue there will always be a way miners will be compensated for running a ring with electricity, because i know electricity bill in mosy countries are quite expensive. So it has to be profitable to get people into it

Albescent

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Miners will keep mining until they stop finding bitcoins and this will, in turn, never let the bitcoin’s price stabilise. And because bitcoin’s price will keep fluctuating, traders will keep finding reasons to trade and make money.

Abiky

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Quote from: Darker45 on May 03, 2022, 08:48:46 PM

It won't be until around the year 2140 when Bitcoin miners would only be rewarded solely with transaction fees. Until that time, Bitcoin miners would be rewarded mostly with newly minted coins. At least 99% of their income is coming from new coins. So I guess it wouldn't be much of a problem in the next decade or so. Whatever happens in the year 2140 and beyond, we can only guess. For now, it has been shown that despite the starting 50BTC reward per block mined decreasing into 25BTC and then into 12.5BTC and then 6.25BTC right now, miners are still increasing in numbers and difficulty is still registering new ATHs.

Neither you and I will live to the point where all of the Bitcoins have been mined. By that time, it's expected Bitcoin's price relative to Fiat to be much higher than what it is right now. It'll probably be in the millions of dollars (USD), allowing miners to profit solely from network fees. That is if we base ourselves in the rules of supply and demand. Considering that Bitcoin is a deflationary cryptocurrency, it has a higher chance of reaching astronomical prices in the future than any other coin being traded on the market today.

If network fees won't be enough to sustain miners' operations, the community can simply create a new fork with a higher supply and a new block reward or modifying the existing blockchain's parameters. No one knows what will happen in the future, so we can only hope for the best. Just my thoughts Grin

Hypnosis00

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They choose to become a miner as they believe crypto mining is a good and profitable business. Too sad to say that some weren't able to survive because of the competition while the others are getting their business growing.

What IF fees aren't enough?
Well, the reality is that mining fees really matter to them, there is no way they would survive in a situation where only they receive rewards that are enough to cover their expenses. Of course, I don't push myself to such a thing, I'd rather quit and make way to find another job.

DaveF

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The BTC network will be fine. 10000 miners at one location or 1 miner each at 10000 locations accomplishes the same thing.
People will mine for fun, people will mine because they believe in BTC, business will keep miners running if they have cheap enough power and so on.
The only people 'worrying' about it are people looking to spread FUD.

I have a small pool (very very very small) that has 2 altcoins on it.
Neither is tradable. Neither is well known. Both have miners at my pool, at least one other pool and a bunch of solo miners.
Remember, no cash value, people are doing this for fun. Imagine what people can and would do if they could make a few dollars.

-Dave

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Quote from: NeuroticFish on May 04, 2022, 01:53:32 AM

We can speculate, but we don't know. Unless you know a time traveler from the future, we don't have a definite answer.
However, getting to rely solely on tx fees happens gradually, which each new halving, so we can try to get an idea. On the other hand, the final step will be far in the future, hence you should not be that much concerned.

For now the things go well, so there's nothing to fix/mitigate. I hope that you agree on that.
Then yes, if it gets unprofitable, some miners will be stopped. It has happened before. The network does adjust in such cases and the mining will be more profitable for the rest.
Keep in mind that there are already miners that run using electricity they produce. This (after all the equipment is paid for) means pure profit, something that may work just fine even if the tx fees remain small. Then the others will turn off, these businesses will prevail, keeping Bitcoin network running.
Then, as already said, I expect that some entities that use Bitcoin as reserve asset (now big companies, in the future maybe countries too) will also mine Bitcoin, not for profit, instead simply to do their part in securing the network.

I wouldn't really call it a prediction that requires us to be a time traveler. I mean the price is out there, without the mining of bitcoin we won't be having 900+ million dollars worth of bitcoin, but that was double and now in half after the 2020 may halving and it's still quite secure. No matter what happens, the price of bitcoin makes sure that the miners do end up with a profit, and that's the only thing that matters.

So this means, we do not need to calculate anything, the question of "will transaction fees be enough" is simple, if it is profitable then it will be, if not then it will become profitable because difficulty will drop.

Topic: What if the fees aren't enough? (Read 687 times)