Bitcoin Forum

Who will maintain the post-mining Bitcoin network and why?

It is often said that, once all bitcoins have been mined, the miners who maintain the Bitcoin network will be compensated with transaction fees. But that will kill one of the main competitive advantages of Bitcoin, which is very low transaction fees.

OK the day when all bitcoins have been mined won't come for decades. But in a certain sense we are already in the post-mining phase, because mining is no longer profitable enough for most individual users. So I think we are beginning to have this problem now - no miners = no Bitcoin, mining not profitable = no miners.

Of course a new altcoin can be created to make mining (of the new altcoin) profitable again and thus provide incentives to new miners, but the new miners would be maintaining the new blockchain, not the Bitcoin blockchain.

Any new thoughts and perspectives on these related issue?

The thing you need to realise is, if we actually manage to hit 21 million coins, chances are Bitcoin will be so popular that the transaction fees despite being so small will probably make the miners more money than if they were mining blocks because of the amount of trade volume we have, think about it, exchanges and the like can operate on 2% or so transaction fees so when you have less than the on an entire cryptocurrency network that can still equal a massive amount of coin for miners.

The reason being because instead of it being about generating currency, it will just be about finishing peoples transactions which will theoretically have no real limit beyond the coins in circulation in how much miners could profit from it so owning a miner with the maximum amount of coins generated would be like owning shares on an exchange.

We are not in the post-mining phase, we are just in the phase, where mining just got more professionalized, as foretold by Satoshi.
I don't want to talk about Satoshi like of a prophet, but as far as I know, everything is going according to his plan.

The fee-system has to be figured, but I am pretty sure, there will be just different fees about how fast it goes into the blockchain. Also think about how many transaction there might be in the year 2100, when everyone is just paying a small fee, it still sums up to a large amount.

OK but doesn't that mean that mining is out of reach of the normal folks? I mean, I don't mine because the little (if any) profit that can be made mining today isn't worth the time and effort, and I guess most Bitcoin users would agree.

I pay money to run a full Bitcoin node on a server to contribute to keeping the blockchain working and public, but how many people do that? We as a society have a very poor record when it comes to maintaining the commons, Bitcoin would never have taken off without monetary incentives.

I'd say everybody with some capital on the side, could open an ASIC-farm.
That might not be the average Joe, but there are still a lot of candidates, who could do that.

I am sure people who live in areas with 2 cent electricity would still find it profitable to mine with the current versions of ASICs available to the public. It is starting to depend a lot on where you are located.

So basically you guys are saying that those with enough money to open an ASIC farm, and those who live in places with very low electricity costs, will be able to make money mining. OK, but doesn't that confirm my point that mining is a useless waste of time and effort for the rest of us?

I am persuaded that the rise of Bitcoin was mostly due to a large network of smalltime users running the full Bitcoin software and generating coins, and I am afraid that there is no incentive anymore.

As far as the other argument is concerned - that once the Bitcoin economy is huge there will be enough of an incentive to maintain the network even if the transactions fee remain low - I think that's plausible, but we must get there first, and how do we get there if the system collapses for lack of individual maintainers?

You're right when you speak about people in it stricly for profit. But the original bitcoiners are in it for the protocol and the decentralization and movement it brings us, so for most people you're right, but for the core community, you're wrong :)

Yes, but that does not mean that there will be nobody maintaining the network. Mining is supposed to be marginally profitable as a whole. The difficulty will adjust dynamically such that in the long run it will always be profitable for somebody somewhere to mine.

Just because it's not "easy money" any more doesn't mean that someone won't do it. 10% return on a capital investment per annum is still considered good.

But anyway in 25 years time, we might be at 50-100MB block sizes with hundreds of thousands of transactions, and that's probably gonna be 1 or 2 bitcoins, where the block reward has dropped below one. $10,000 - $20,000 per block seems to be enough to incentivise a "decent" amount of mining power to remain on the network, so if bitcoins are worth at least $5000 each by then, then we have no worries.

It's like worrying about what happens to blob of wax in the lava lamp "OMG it's gonna keep rising, break the lamp, break the ceiling, break the sky!!!!" no, just... no... it's all self balancing.

Yes.  Mining is a competitive business.  As such, it will only be profitable for those who have access to the most affordable necessary resources. Others may mine at a loss as a hobby, but as a source of income it will be a waste of time and effort to those who don't ahve access to competitively priced resources.


There are many incentives for bitcoin use beyond mining for cheap profits.  The fact that it is an electronic form of payment with no counter-party risk is a huge incentive for merchants. The fact that you can create backups of your money is an incentive for users.  There are several other incentives as well.


It won't collapse.  If total global hashing power is reduced then the difficulty will be reduced which will result in mining becoming more profitable for others.  As profits increase, more people will start mining again which will result in difficulty increasing again.  Eventually a mining equilibrium will be reached.

Those are incentive to USE Bitcoin, not to MINE Bitcoin. You can still benefit from all that if you only do off-chain transactions with Circle or something like that.

You and I are part of the core community, but how much % of the total number of users does the core community represent? 0.1 % or less I guess, perhaps much less. We could never maintain the Bitcoin network without the unwashed masses that are in strictly for the money.

This IMO is why BTC needed a minimum payout block like Joulecoin.

Correct.  You were stating that "the rise of Bitcoin" was due to profits from mining.  I'm pointing out that there are still incentives to encourage the rise of bitcoin USE.

If you are specifically asking about the incentives for mining, then mining is currently supported through a subsidy of 25 BTC every block (with blocks occurring on average every 10 minutes).  That subsidy will be cut in half every 4 years.  As the subsidy shrinks over time, the transaction fees will become a larger percentage of the incentive.  Difficulty is adjusted to maintain an average 10 minute interval between blocks.  If there isn't enough incentive to  profitably support the total hashing power available, then some hashing power will go away and difficulty will be reduced.  This will increase the profitability of the remaining hash power.  An equilibrium will be reached where the total available block reward (subsidy + fees) is just slightly profitable for the total supplied hash power.

We don't need everyone to be involved in mining.  We only need enough mining to maintain the security of the system.  Everyone else gets to be users without needing to be involved in mining.  This was always the intended design and was described as such by Satoshi when he was talking about the design of Bitcoin.



No, you can not.

Off chain, you don't have bitcoins, you have gift vouchers. If the issuer goes out of business or refuses to accept at face value any more or applies annual fee or negative interest, you're SOL...

Holders of "bitcoin vouchers" in MtGox were attempting to sell them for as little as 5% of nominal face value earlier this year.

But I'm sure none of that worries you, they're just as good right?

Good point, and thanks for posting the quote from Satoshi in 2010. Yet I am still concerned about "enough mining to maintain the security of the system." If mining is only done by a handful of very large operators, what prevents them from pooling resources and launch 51% attacks to disrupt the network and grab others' money? Please don't answer "government regulation" - we can't eat the cake and still have it.

I would be interested in hearing new ideas about how to make the mining system just a tiny bit more public, open and sustainable. Of course Satoshi's wisdom is legendary, but I guess he is just a person like us. Smarter, but he still puts his pants on one leg at a time.

OMG Apple has 100%-ed the iPhone market, what's to prevent them from selling you a solid, inanimate, lump of plastic and telling you it's an iPhone?

I mean they are in 100% control of what an iPhone is, they could make it anything!

Yah well, they'd be out of business next week.

According to the worriers or FUD rakers, this is a rock solid guaranteed to profit scenario and sound business plan for anyone that goes over 50% of bitcoin hashpower.

Supply and demand. The fee will always be about the lowest amount that can sustain the network. If the fee is "high" then someone will come in and process transactions more cheaply. If the fees are to "low" then a transaction may not get processed.
This system will always out compete a for profit business because they have many more mouths to feed. Bitcoin is not free because the world is not free. The bitcoin protocol is cheaper because it eliminates middle men and opens up competition that anyone can participate in.    

Pooling resources doesn't allow miners to "grab others' money".  It only allows them to choose which transaction get confirmed.  Large operators will have a large financial investment in their operation.  It would be counter productive to damage the reputation of the bitcoin confirmation process as they wouldn't be able to earn enough to cover their costs.  Additionally any large merchant that chooses to accept bitcoin will have a direct financial interest in its stability.  This incentive is likely to result in large merchants setting up their own mining operations (perhaps even mining at a slight loss) to protect their interests.

Bitcoin is an experiment.  It is very difficult (impossible?) to predict what will happen in a decade or two when the subsidy gets small.  We can anly let the experiment play out and see if the incentives are properly balanced, and adjust them in the future if necessary.


Legendary would be a good description.  He was a mediocre programmer that happened to come up with a really good idea on how to handle distributed consensus.  Any amazing intelligence or wisdom assigned to him beyond that is nothing but stories.

Well, that makes it easy to blackmail others and grab their money. Say good-bye to the 100 BTC that were sent to you yesterday, or send 50 BTC to me first.


Yes, that's the question I am asking. How could we adjust the incentives if it turns out that they are not properly balanced?

And again:
That is just not how mining works. Everything a miner can do, is not accepting a transaction. They can not steal your BTC.

in the future, the Peta hash of bitcoin is nothing ... specially in 140 years.

As the block reward drops and the market cap rises, mining will become more of a competition for control than it is for profit today. It is a scheme where rich would need to compete with each other, possibly at a loss, in order to maintain a share of control, so that their accounts don't get frozen. This prevents rich getting richer without engaging in a fair competition with risks of losing.

Bitcoin separates money and control, so that competition for both is ensured and never stops. I believe forum's logo is not accidental, as it symbolizes the balance point between the two, and yes Bitcoin is a very simple machine.

I agree as a miner I would rather receive transaction fees for every block I mine rather than the hope of 1 block out of a possible 1000 i mine holding 25 coins. Even if the fee is small the more you mine the more you get this would create an even larger demand for people to want more and faster hardware.

Right now the race is to find a random block, once all coins are released the race will be to solve as many blocks as you possibly can in a day.


I think it will be more profitable in the future to mine BTC than it is now.

You used a lot of words, but they didn't really make any sense the way you put them together.

You do realize that EVERY block includes 25 BTC right now, right?

You do realize that, more than 120 years from now when the block subsidy is over and the only block reward is the transaction fees, it will still be a race to "find" a random block, right?

At the moment, the block reward consists of a block subsidy (25 BTC) plus the sum of all transaction fees from all transactions included in the block. Approximately every 4 years (exactly every 210,000 blocks), the subsidy is cut in half.  Eventually (around the year 2140) it will be reduced from 0.00000001 per block to 0 per block.  Meanwhile as bitcoin gains popularity, and the transaction volume increases, an ever larger percentage of the block reward is from the transaction fees.  There will come a time (long before the block subsidy is eliminated) that the transaction fees will typically be larger than the block subsidy.

While it doesn't add a lot to the conversation, I want to say kudos for getting this right.  So many people are concerned that they can't eat their cake when they have it instead of realizing that they can eat it, but will no longer have it.  However, and I mean no offense, but the fact that you understand how cake works makes me wonder why you are having such a hard time with bitcoin blockchain generation.  It doesn't seem like the word mining is confusing you, but it isn't obvious what is, either.

ETA:  If you research my posting history, you will see plenty of confusion.  This is easy for me to forget, but posting makes me think a lot more than reading does.  Perhaps, if you truly are confused, and based on your last posted concern, you should look into how to "cancel" a transaction that is "stuck".  I say this because you presumably know that a transaction cannot be cancelled, but may not know that it can be forgotten.  So if you understand that it can be forgotten, it makes it easier to understand that in order for someone to even attempt to hold it hostage, they would have to remind everyone else it exists, and they would have no good way to prevent everyone else from mining it.

I'll take this one-sided discussion a bit further and say this: short of a "51%"  attack, which there is a lot of FUD about, but realistically, even though it is theoretically possible to perform such an attack with much less than 50% of "hashing power," to make it practicable in the preventing all other blocks/transactions sense, it would take a lot more than 50% of "hashing power" or a lot of losses on a lot of attempts.  The general argument here is that this isn't a realistic concern given that people don't tend to like to take on investments outside of spy movies where you have criminal masterminds with seemingly unlimited money to spend on crazy schemes to get even more money or take over the world.

ETA2: I have a negative view on society as a whole, and could definitely see counterarguments to this 51% argument considering the amount of money spent on lobbying to screw over consumers by large corporations (that can also be read as depositors by large banks), but that goes way outside the scope of your original question, to which the answer was a very simple "miners" and "for the fees".

Regarding 51% attack. It is utterly important to have such a possibility, as it is the only way for economy in general to take control over the system back from the rogue entity. If control cannot be challenged, there would be no competition for it. End of story.

We can consider mining (in the long run) as an automatic built-in tax on the rich. You simply cannot sit on your money and watch how your competitors gain more and more share of control. At some point they will be in position to not allow transactions from your addresses and can tax you any way they wish. The assertion is that large amounts of money can be tracked on the blockchain and the whole thing remains quite transparent in the future, which I believe it should. It is possible that competition for control will be so strong that literally all participants will be doing it at a loss. This will keep everyone busy and bring balance to the world.

Thanks to all participants in this interesting discussion. I have written a wrap-up article, comments welcome: Post-Mining Bitcoin – Collapse or Sustainable Growth? https://www.cryptocoinsnews.com/post-mining-bitcoin-collapse-sustainable-growth/

Honestly I think the incentive will be security.

If you want your money to be secure, by ensuring that the network is secure, then you'll set up a little ASIC to solo-hash somewhere in your home.

Because the little ASIC is essentially your bank.

Sure, it may be 100 watts and cost you X$ / year, but nothings ever free.

Time for someone to build the first solar powered all in one weatherproof wifi hashbox.

(sorry if this was mentioned in the above, TL;DR)

True enough.
Mining will become the price of vigilance in the land of freedom.
Some will be willing to pay more to be extra sure, others less, some wouldn't even bother.

It's also important that 51% attack vector remains open.
Yes, freedom can be attacked, that's how we know we have it.

It is a misnomer to say post-mining Bitcoin.  There will always be mining (although not always Block rewards).

^^^ yeah, this is why I try to refer to the process as "hashing" instead of "mining". Is there a better term?

Transaction processing?

Transaction confirming?

Block solving?

Ledger security?

Consensus forming contribution?

I think a better way of saying this would be there will not always be block subsidies.

The block subsidy is the bitcoin that is "created" every time a new block is found, currently at the rate of 25 BTC per newly found block. Block rewards make up both the block subsidy and the TX fees (the difference between the total inputs and the total outputs of all transactions included in a block).

In the event that block rewards were to stop (for example if no one is using bitcoin anymore) then mining is all but certain to all but stop

I am sure the Bitcoin Foundation will put aside a small amount of money for mining, in case the block reward is not sufficient to attract sufficient number of miners.

That is why fee is there. It's purpose is to fund anyone who is maintains network after every coin has been mined.