Bitcoin Forum

1) how will the system distribute transactions to be processed (for that matter, how does it happen now)

2) can you bypass fees altogether by using your own wallet and hashing to process the payment?

3) will pools then cease to be viable?

4) since fees will be based on byte size of transaction, what impact will using different bitcoin addresses for each transaction be versus nout having different ones?

After 2030, we will have mined about 99% of all bitcoins. Between 2030 to 2140, it's going to look the same. Miners will mine for transaction fees, mostly, until miners will mine for transaction fees only.

I don't get it, how do you know after 2030 99% will be already mined? and why 2140? care to explain? I don't really know much about mining  :-\

After 2030, we will have mined about 99% of all bitcoins. Between 2030 to 2140, it's going to look the same. Miners will mine for transaction fees, mostly, until miners will mine for transaction fees only.

By then bitcoin will have changed A LOT, trust me.

I sorta understand the concept of mining.  But how exactly do miners mine for transaction fees?  I don't quite understand who GETS these fees, why they get them, etc.

I sorta understand the concept of mining.  But how exactly do miners mine for transaction fees?  I don't quite understand who GETS these fees, why they get them, etc.

As I understand it, then 100% of all hashing resources will be to process transactions?

1) how will the system distribute transactions to be processed (for that matter, how does it happen now)
at this point instead of millions of miners, there would be only dozens, as it has become expensive to mine. ( much like the change between the pickaxe and the excavators for gold mining) so although there is no "block reward" the transaction fee's would cover the costs of 10 minutes work
2) can you bypass fees altogether by using your own wallet and hashing to process the payment?
no i cant. ill be retired, have died by then. but my grandkids could, but dont expect the greedy mining pols to put your transaction into a block ASAP
3) will pools then cease to be viable?
maybe, but this is a question you are asking answers for, that only apply in over 100 years, so no concern for you. but the answer to question 1 will atleast point you in the right direction.
4) since fees will be based on byte size of transaction, what impact will using different bitcoin addresses for each transaction be versus nout having different ones?
right now it seems the people pushing for single use addresses EG Luke Jr and death&taxes seem to be also pushing for people to send a fee with every transaction. meaning no matter what, pool owners/miners will want to be paid

you are really concerned about something that won't happen until 2140??   It will be an entirely different world by then in most every possible way.

right now i beleive the block rewads are more then enough for miners. and that it is greed at the expense of helping the community that these miners demand payment. only when block rewards disapear, then and ONLY then will paying fee's be part of helping the community, and only then would it appear greedy for individuals to not want to pay a nominal small fee. again over 100 years time.

there needs to be a shift away from the concept that mining is the only way to make money in bitcoin, and get people into retailing. EG selling coffee, tea, food, clothing for profit. much like how the gold miners hung up their pickaxes and opened saloons and distilleries and asked for gold as payment.

lets say 2012 based on minimum wage.. the reward was enough for 300 miners to be given $6 an hour
today with todays price (based on minimum wage) the reward is enough for 15,000 miners to be given $6 an hour. promoting more then 15,000 to work is slave labour, causing miners to then spend more money to get a bigger slice of the pie ( pay rise) which is backfiring by causing the difficulty to jump higher and higher. basically shooting themselves in the foot and demanding extra money from other means (EG merge mining and demanding fee's)

pool mining owners need to realise that if there are (random number dont knitpick) 15 main pools around they need to set a limit of 1000 miners

I'm sorry, but the reality is that including transactions in a block has a real cost in terms of network bandwidth, data storage, and increased risk of orphaned blocks. It costs miners money to include transactions which don't pay sufficient fees. The block reward is not enough.
$300 per 10 minutes in 2012 - £15,000 per 10 minutes in 2013.. thats how much JUST the reward is. i think the protocols DO NOT need changing to make miners richer EG limiting what type of transactions are included or not. but instead get the mining pool owners to manage miners better. EG only allow x amount of miners per pool so that when that block is solved. the amount shared out IS enough to cover real life costs


Mining is the only way to make money in Bitcoin. Retailing only transfers money that already exists.
your statement has mis-understood my meaning. your taking the literal meaning of making EG about the physical creation. im talking about receiving an income. so lets keep to to receiving an income, as that is what is implyed/color]

Gold miners hung up their pickaxes because there was a demand for other services that can't be provided if everybody is mining. But some people had to keep mining, otherwise where does the gold come from that people are paying with? The number of people who continue mining is, ideally, a function of the relative demand for gold versus other goods and services, and that's the way it should be (and indeed is) with Bitcoin.
whether there are 3 miners or 30000000000000000000000 miners in bitcoin, the difficulty adjusts to stay at a constant 3600 coins per day.. so adding more miners into pools wont exceed this hard limit!!! it just means each miner gets a smaller slice of the pie.

You do realise that miners are machines, not humans, right? And that it's the humans' choice whether to run the machines and how many machines to run? Evidently not.

How do you guys know that transaction fees will be enough? Right now it's less than 1% per block. I don't see how the income from fees could increase at least 100-fold. If we increase the base fee per transaction, then Bitcoin becomes even less suitable for microtransactions, and just becomes too expensive in general. If we don't then as block rewards drop with time, you'll see less and less miners, which means the difficulty will drop, which endangers the security of the network.

dont worry about 2140.  worry about 2017, when the reward halves.  consider the current calculations for ROI on mining tools, i don't see the increases in efficiency of mining making it that far.  the reductions in die size of ASIC's are not going to keep step reducing power, manufacturing and support costs of running miners.  the value of Bitcoin has to rise substantially to cover this shortfall.  maybe it will, but that an increasingly risky proposition without a fundemental upsurge in use of bitcoin for trade, rather than speculation or paying for mining equipment.

If Bitcoin goes up in value (USD:BTC) by 10x and the BTC subsidy gets cut in half you would expect less miners?

Hint:
In 2009 the block subsidy was 50 BTC and the network difficulty was ~1.
In 2014 the block subsidy was 25 BTC and the network difficulty was ~700,000,000.

By your logic shouldn't difficulty be <1 right now?

If you are thinking tx fees need to rise to 50 BTC per block well no, that is never going to happen.  It also doesn't need to happen.

Does that mean the network will get smaller?  Probably not if Bitcoin is more popular.   The exchange rate would only need to rise 25.5/14.5 = 75% to $1,230 USD per BTC for miners (collectively) to make the exact same ~$1B in annual revenue they do now.   That is just with a 75% rise in 3 years.   If it is more than 75% then the network will probably be bigger than it is now despite the block reward being lower (much like the network is 700 million times larger now then when the block reward was 50 BTC).

This is a problem in my mind. It means mining stays the same, but the network and its activity grows, which means less security relative to the size of the network. But if the network grows, won't we need all that extra security?

The reality is the network today is likely more secure than it needs to be. It pays miners roughly $1B in revenue for a network which has far less than that in current day real economic activity.  This isn't really a problem because the secondary goal for mining is to provide the initial distribution.  I am not saying Bitcoin is hurt by "too much security" but it also wouldn't hurt if that ratio declined some.  

Bitcoin today is kinda like using a $50,000 safe to protect a single 1 oz gold coin.   Now imagine you didn't upgrade the security and added an additional gold coin each year for the next couple years.  Not really problem although the ratio of security to gold has declined.  

Still the 75% was just to highlight how small of a rise in the exchange rate would be needed to keep the hashrate roughly the same in the face of block value declining.   75% over 3 years is 20% annualized.  I am fairly certain if Bitcoin continues to be adopted it is going to grow faster than a 20% annualized rate.  If it doesn't then well having the network hashrate fall by half is probably the least of our worries.  Satoshi was a clever guy, the incentive to "do the right thing" grows with the value of the network.