Topic: what will happen after 21 million bitcoins are mined? (in layman's terms) - page 2. (Read 521 times)

You are really not using LN optimally if you are opening a channel and making a series of one-way transactions. The optimal way to use LN is to open a channel with some value of coin on your side of the channel, to spend some money via various transactions (perhaps "everyday" transactions such as buying coffee), *and* receiving coin via payments for things such as your salary and/or goods/services. So you may open a channel with enough money to pay for 20 coffees, but are able, over a period of time, to buy hundreds of cups of coffee because you continuously receive (a portion of) your salary to the channel.

So someone opening a LN channel can reasonably pay a high fee compared to the size of the channel, if they are confident their counterparty will not give them a reason to close the channel quickly. This will allow miners to receive a larger amount of coin on a per-block basis, even if the maximum block size is not increased.

Oh my bad Im not a mining guru so i thought it can be possible . But even its mined out all supplied its their choice what to do on those equipment, maybe continue using it on bitcoin for the transactions fee. Probably there are ways how to remedy those unused equipment if that event happened. Prices will definitely go down due to this, but continuing the processing of transaction could increase their fees even without block reward for mining. Im just assuming that they could shift to other coins for the sake of mining.

Bruh, 5 years around here and you still think a sha256 ASIC could just mine scrypt just like that? ASICs are not GPUs, if you can't mine bitcoin or the two lame shitcoins cash and sv then there is nothing left to mine with them, recycling is the only thing they are good for! Look what happened after ETh went POS, all those video cards are almost losing money while mining, the same will happen here, instead of 7 cents per th/s a day you will be making 0.07 cents! as in $0.0007.

Miners adventures on bitcoin will come to an end. But their equipments will not be wasted since they can use it to mine other supplied last coins like dogecoin and others. The value of bitcoin will depend on demand, imagine there would be no bitcoin to circulate coming from them, imagine the action price or effect of it in the long run. It will also be good I guess.

When the price was 60k, a s19 was 10k , a cool 100$ per TH/s, right now you can buy the pro for 19$/Th/s with next day delivery.
Back in April, you couldn't attack the network because there was no gear to buy, right now you have tons of both older gear that is not feasible to mine with and tons of new gear that isn't being bought and tons of orders getting canceled so you have that one click away.

So it's not about how big the hashrate is, it's about how much it will cost an attacker to take over it, no entity is really feeling threatened by a system with the marketcap the size of Nvidia and with 200k daily transactions, when it reaches 10x times that, do you think $20millions a day will be enough to repel an attack?


It's all good on paper, and of course, almost everyone here (except for franky1) would use it, but you think the average Joe who is angry at banks for taking him 1$ a month for card maintenance will be the one opening and closing channels like that? Make it ten cents and then we talk  


Of course, we need more adoption, we need more spending we need usage, not fancy bitcoin towns, laser eyes, and Vulcano bonds, but all those memes about holding two satoshi cause in 20 years you're going to buy an island with it are definitely hurting actual usage.
Fortunately enough there is an almost certain failed experiment happening right now with ETH and I'm pretty sure in a few years we will have plenty to learn from what happens when people just store money in order to get more money out of thin air without doing a thing.

Hence my comment about multi-user channels. If you could open a channel which includes 20 users, they can all pay $2 which is fine for the user, but the miner earns $40 for that channel being opened.

I don't think we necessarily need the same security as we have now. Bitcoin's hashrate has been on a more-or-less steady upward climb since day 1. It wasn't 51% attacked when the price was 3x what it is now with half the current hashrate, and it wasn't 51% attacked when the price was the same is it now but with double the block subsidy and only a tiny 5% of the current hashrate. It's about making sure the fees ensure the network is secure enough, not that the hashrate continues to increase forever more.

Then we need more adoption and more use as a currency!

Most probably the fees will rise as they will not remain static as we are 601 days left from the next halving at block 840,000 when the rewards will be halfed to 3.125BTC per block and coins in circulation will also reduce but the transaction would increase I would say even if we take into consideration the layer 2 like LN channels and you would pay more to confirm your transactions even if we say in the short span also so the miners profitability is still there.

Yeah in the meantime we may see some more development to tackle the fees issues in much more efficient manner but we are seeing the LN capacity being increased each time and they are being used by many to make regular transactions saving them from fees and LN nodes support being rise with bitcoin block space limitations.

If that's the case then it's pretty much efficient for miners to have that much amount in fees only as an extra reward along with bitcoin earned so we can say that they will have around $250k as block reward plus $100k-$160k in fees as well so securing the network would still be profitable fort them and we will see more support from the users as well.

It's just a hypothesis and would not be fully put to the test until a while in the future. The perspective of LN taking many of the transactions off chain and only needing to open or close channels on chain, increasing the fees of such individual transactions. The downside is such a situation would practically force everyone to go for off chain means of transacting as, no one would spend ridiculous amount on a single transaction.

If you pay 2$ for opening a channel and we balance the block perfectly and we forget about closing the channel completely you will still only be able to cram in only $8000 worth of fees, so yeah, for you it will definitely work but the miners will have to deal with a reward of just $8000.

From a miner's point of view, sat/b doesn't matter, what matter is the pot, if bitcoin reaches 100k or 1 million I don't see users suddenly paying 10x times more just because of that, the overall fees that people are willing to pay must be enough to compensate for the diminishing reward, and there is no way to force them to pay that much if they don't want.

Two different things, how much is one user willing to pay on tx, and how much is required in fees to keep at least the same level of security as now!


More concerning it that we're nowhere near having full blocks actually as on-chain transactions are going down rather than up for the last few years.

Not sure where you are getting this number from? Even if we say that bitcoin goes to $1 million, and you can open a Lightning channel in a transaction of a few hundred vbytes in size, then with a fee rate of 1 sat/vbyte you are looking at $2-3 to open a channel. Even if we go up an entire order of magnitude say it's going to cost you $30 to open a channel, if I then use that channel to make a few hundred transactions over a period of months, then it is overall it is still cheaper than had I made all the transactions individually.

You can always rebalance channels, and there are new developments such as channel factories and Eltoo which allow multi-user channels. With enough global adoption of bitcoin, there will be enough volume on the base layer simply from opening and closing Lightning channels (or some other layer two mechanism) to maintain the security of the network.

It may be that a further block size increase is needed in the future, but we are nowhere near that stage yet.

Before thinking of the price that would be required, think of the first part mentioned, transactions cost would have to be ~$125k, if we take the last full block, 754925 has 1,492 transactions, so that would be around 83$ per tx, who do you think is going to pay that amount? People who move millions, yea, but nobody is going to pay even a $500 yearly subscription at these levels.

It's the opposite way, it's not like fees will have! to compensate for the reward, it will be how much people will want to pay in fees and from this, we will find out how much of the block reward will be replaced by those fees.  For a brief period in 2021 the average fee went to 60 with the network clogged completely, this won't last for more than a month simply nobody is going to pay those forevers, there won't be any constant pressure to pay that much, they will simply abandon transacting alltoghehter.


But you will still need to pay on average 1$ for each coffee purchase to conitribute enough to the network.
So you either lock in 1000 coffee purchases or we, hmm, how do I say this, we increase the number of possible transactions in a block, by increasing something... something.. not width, not length, but , maybe size? 

OP you said, you have asked this question many times, and you create this thread on September 17, 2022, 08:00:54 AM and the account was opened on September 17, 2022, 07:46:34 AM that means indirectly, this your alt-acct. By the way this not the first this kind thread has been created and different answers have been given to the question. In my own way of answering the questions is that the 21m BTC can not be exhausted because it is circulating everyday that is, transaction is moving around 24hrs. If you are not selling, another person is selling and if you are not buying another person is buying so the circulation of bitcoin is 24 hours. And nobody can buy and keep bitcoin in his wallet for years. You must buy something so exchange is always there. And another thing again. As far as people are mining bitcoin, it will never exhausted. And people must mine. One thing people need to understand is that bitcoin is not a goods that you pay but it is an asset.

Miner will just get compensated with transaction fee and the total amount of Bitcoin will then become fixed excluding those that has been lost in real time, those whose private keys can't be retrieved. This 21million Bitcoin which is highly divisible into sats and will be so much enough to meet the millions of souls in exsistence

Agree with the first sentence, but not as far as the last coinbase reward. For the last 10 halvings (or ~40 years), the block subsidy will be under 1000 sats. For 1000 sats to even be worth $100, then a single bitcoin would have to be worth $10 million. The coinbase reward will be irrelevant in the grander scheme of things long before the last coinbase reward.

Not necessarily. Lightning is currently both more private and more censorship resistant (against the likes of centralized exchanges and wallets enforcing taint and blacklists) than the base layer.

Which is fine. If I'm paying for a coffee, there is no need for me to use the base layer, and Lightning brings advantages in terms of both speed and fees.

No one is able to predict what will happen next year, let alone time frames like decades or centuries. So, no one knows, and no one can tell you if bitcoin will even exist after miners stop getting paid via freshly-mined bitcoins. Staunch bitcoiners like myself expect that transaction fees will be enough to incentivize miners to continue providing security to the network, but for that, the price of bitcoin in fiat terms needs to go up considerably so that transactions fees would also be a sufficient amount to replace bitcoin block subsidy. However, the problem with high transaction fees (in fiat terms, not in bitcoin units terms) is that the base layer will become almost unusable for people wanting to transfer tiny sums, forcing them to switch to something more economically reliable, for example, sidechains, layer 2 solutions like Lightning Network or even alternative blockchains. So, in the future people will conduct most, if not all, of their transactions outside the base layer (the Bitcoin blockchain), which naturally will result in such undesirable outcomes as a decrease in security, privacy, censorship-resistance, and decentralization. The Bitcoin network will remain robust and decentralized and will be used for settlements of large transactions, but these transactions will no longer be a representation of individuals exchanging with other individuals.

That's just a little less than the last ATH, so it's definitely a feasible amount per Bitcoin. There would also still be a percentage coming from block rewards, at least for the next 30-90 years. And the significance of that could get much higher with increasing value. Maybe even to the last coinbase reward being claimed.

I've always had the perspective that the rewards to mining requirements ratio, is a system that can regulate itself, especially as there are so many years between now and the finite supply and many gradual decrements between now and then.

The change will be that all mining revenue will come from transaction fees, as opposed to a percentage of revenue under the status quo. As oeleo discusses above, it is likely that the majority of mining revenue will come from transaction fees in the next several halvings, and nearly all revenue will come from fees well before the block subsidy goes to zero.

I suspect that transaction fees on a per block basis will likely rise over time (up until a point at which the market will no longer support higher tx fees) as adoption of bitcoin increases. The specific timing when transaction fees will make up the majority of revenue can be debated, but I think most would agree that this will happen sometime in the next few decades.

This is based on the assumption that total fees per block will remain static, which as I mentioned above, I don't think they necessarily will.

We already know that block space is too limited as it stands to scale bitcoin to global usage, which is why second layer solutions are being developed. Currently, almost all of my transactions pay a fee of <5 sats/vbyte. If I'm paying for a coffee, fast food, or some other small transaction, then a fee much higher than that starts to become a significant amount of the transaction and therefore unacceptable to me. Let's say, however, that I move all my coffee buying on to Lightning. Now I can pay a fee of 50 sats/vbyte to open a channel, and then buy 100 coffees through that channel before I need to close it. In this scenario I have saved money on fees by paying 0.5 sats/vbyte per each of my 100 transactions, but at the same time I have paid 10x what I would usually pay for the block space.

So provided there is enough demand for block space to support things like opening/closing Lightning channels at a higher fee rate (which is still economical for the end user), as well as very large transactions which will pay a higher fee for the added security of being on the base layer, then the fees paid could increase by an order of magnitude or more, while individual users still pay less by moving most of their transactions on to Lightning.

In this scenario then fees per block could total 1-2 BTC, rather than 0.1-0.2 BTC (example numbers), meaning a price of $80k rather than $800k in your example.

This opens up a new perspective in the discussion, which I had not thought of before now.
At the current block reward of 6.25BTC, miners averagely earn $122k - $125. Using the current average rate of one Bitcoin. If you include the tx fee, that's an extra ~$3k.

For the reward of mining to remain commensurate with the current value (in USD), i.e, 0.15BTC giving miners about the same amount they are earning now, which is ~$125k, then the value of 1 Bitcoin needs to rise to above $800k. That's a huge leap from the current price levels.
Would we likely be seeing $1 million to 1BTC within the next 25-30 years?

Firstly, not everyone is savvy in using the forum search option, or is aware of it.
Asking questions is also a form of learning and research, if the said user follows up on answers and discussions bordered around their questions.

Just as the answers were received by you that miners will depend on transaction charges to make thier income and that settles it all, but now about you OP, you just registered your account, don't you think tou need to engage some forum search in other to take survey on aspects like this related to your question maybe it had been talked about? If i were you, i will engage doing much of learning and research than talking just to build myself, finally, let me drop you with this Newbies - Read before posting