Bitcoin Forum

Hi all,

A bit new to this bitcoin currency, but already in love with it ^^
If my understanding is correct the security of the network is insured by millions of computers all over the world solving complex mathematical equations.
Those calculations are rewarded by mining. A computer that help securising the network is rewarded this way.

My question is, what will happen after all bitcoins are mined? or when it is no more profitable to keep mining? Who will ensure the security of the network then?

Thank you.  :)

And the block subsidy or as some call "block reward" is really a way to securely/fairly release new bitcoins to the bitcoin economy.
When all bitcoins are released into the bitcoin economy by 2140, only transaction fees (or called miner fees) will be the "reward".
Miners fees, which is currently 0.0001 btc are not set in stone and can be adjusted up or down depending on what is needed, when needed.

After all the blocks reward is mined, Bitcoin will survive solely on transaction fees. At that time, the price of Bitcoin may be higher or lower which would either lower or rise the transaction fees respectively. By that time, hardware advancements and renewable energy would make it profitable to mine. If it is still not profitable for those paying electrical fees, those who do not need to pay for electricity can then mine more profitably due to difficulty drop.

welcome here.

bitcoin is like a rabbit hole. make sure you also watched:


https://www.youtube.com/watch?v=O0oDDIy0P2s

https://www.youtube.com/watch?v=2cMjR0mB9Sc

 :)

Transaction fees, plus if it's still used when all the coins are mined, there will be such a strong infrastructure (also government controlled probably) that security shouldn't be an issue.

Miners will have to rely solely on the transaction fee to get the network going. I wish I could still be there but I think by 2140 none of us here would still be around to see what's the real impact. Anything could happen within that space of long period of time, so it's really hard to imagine

i think it is going to depend a lot on 2 things first the price of 1 BTC and then the price of the newer equipment for mining. miners can still profit from mining if there is only fees are considered as reward of the mined block and the prices that i mentioned are at a good ratio

There will allways be mining, but when the 21 million bitcoins level is reached , the mining reward will be only the fee from users sending bitcoins.
It is speculated that by then the price/the number of transactions will be so great that it will be still profitable to mine, thus ensure the security of the network.
So, there is nothing to be concerned about.

You have alot of questions answered here, you may want to take a look: https://en.bitcoin.it/wiki/Myths

cheers

after pow rewards drop to very low miners will keep mining for transaction fees

We still have over 100 years to go! Too early to worry about that now. When bitcoin takes off, transactions could be in the thousands per block. Fees would be huge. It will be profitable for miners to survive purely on fees.

The security of the network is indeed ensured by millions of computers around the world. If all the coins were mined, basically miners will shut down their machines as it will not be profitable anymore. The solution for that is yet to come though, because we can't just simply change the tx fees and increase it because it is against the main purpose of bitcoin.

Agreed. It also depends on how much will be the value of bitcoin by the time we mined all the 21 million coins. Tx fees are the only incentives miners will receive if ever, so if the value of bitcoin is high, sure enough miners will continue to mine because it's still profitable to do so.

We do not have to increase the transaction fees to compensate. We could increase the transactions within a block.

We certainly don't need to increase the tx fees in order to compensate. But how are we going to increase the transactions within a block? That will increase the incentives the miners could get if ever.

The block size can be increased with a fork. At this moment, a block cannot be larger than 1MB and bitcoin can only handle 7 transactions per second. This is not a big problem now, but if bitcoin becomes more and more widely used in the future, it could be a problem.

They really aren't all that complex.  It's just a simple SHA256 hash.  The tricky part is finding one that has a value lower than a target value.  Since the SHA256 hash can't be done in reverse, this means everyone just keeps trying different input values until someone stumbles across an input value that will result in qualifying hash.


No.  Those calculations ARE mining.  They are rewarded with the block reward.  The block reward is the sum of the block subsidy of brand new bitcoins plus all the transaction fees of all the transactions that are included in the block.


The block subsidy is cut in half every 210,000 blocks (approximately every 4 years).  It started at 50 BTC per block back in 2009. It is currently 25 BTC per block.  In 2016 it will be reduced to 12.5 BTC per block.  This will continue until approximately the year 2136 when the subsidy will be cut in half from 0.00000002 BTC per block to 0.00000001 BTC per block.  Four years (somewhere around 2140) later the subsidy will go from 0.00000001 BTC per block to 0.00000000 BTC per block.  Since the block reward is the sum of the fees plus the subsidy, and there will no longer be a subsidy after the year 2140, the block reward will consist entirely of the transaction fees.


If mining becomes unprofitable for some, then they will quit mining and the total amount of hash power on the network will drop.  In response to this, the difficulty will drop (difficulty is automatically adjusted every 2016 blocks).  The reduction in difficulty will increase the revenue for those that remain mining.  So long as there are transactions paying fees, and so long as bitcoin has value, there will always be someone that wants to get paid with those fees and is willing to run mining equipment to earn that revenue.


The miners that have access to the cheapest resources.


You're welcome.

what if the price at that time is just $500 for example. pools will only lose money if tx fees won't get an upgrade.
how many pools will keep their miners run then?

The ASICs should be much more efficient and electricity would be much cheaper at that time. This shouldn't be much of a problem. There are still miners who would keep their ASICs running just solely to support the network and not for profit.

I think that Bitcoin will support additional services which will increase the income from transaction fees.

they keep mining for the fee, and i presume only the biggest farm will remain, maybe only one big farm at the end

which could lead to 51%, the irony...

In the end, the cost of securing the network has to be paid somehow or other to miners and maybe nodes. If you're concerned about a scenario where transaction fees are not enough and yet transaction fees also cannot be raised without making Bitcoin uncompetitive with other systems, that is a scenario that doesn't really make sense. After all, the idea of securing the network against a 51% attack is that the attacker would have to expend too many resources to make the attack worth it. Whatever that magic number is at any given time, that's what users will pay.

Bitcoin users will always pay roughly the right amount for security, whether by fees or whatever. This may require fee floors or even changes to the block reward, though the latter is held more sacred even though they aren't much different in terms of store of value (all savers eventually spend; likewise, all spenders are savers for some amount of time), but by hook or crook the network will be secured.

Someone still might wonder if the magic number of "cost to attack" might fall below "maximum fee rates that would enable Bitcoin to remain competitive with other systems." It certainly would not for the fiat money system, but some might still wonder about proof of stake and other schemes. People can cook up all the schemes they want, but at the end of the day a full open-participation network that is cheap to secure is cheap to attack. In other words, if no user is given preferential treatment in the eyes of the network - meaning the network is dumb/neutral - it cannot be both cheap to run and expensive to attack, since there's no central authority deciding who's a good guy that should be given a cheap way to vote for what the truth is, and who is a bad guy who should be made to pay a lot to have their say over the network.

when mining stops the difficulty will reduce accordingly.
 only few miners who willing to mine for transaction fees will remain

How can be bitcoin "goverment controlled"?? ... you are making no sense. They'll never centralize mining, they cant do it now, let alone in the future as the network grows even more.

There are several big farms around the world which have access to cool air and cheap electricity. The probability of only one entity mining is very low since there are also enthusiast mining to support the network.

block rewards will never end. in other words all bitcoins will never be mined since the reward halves every certain number of blocks. also you forgot about the transaction fees. in the future it might be increased to cover the mining costs.

Thanks for sharing.

It does end. It will discontinue at around 2140 which is a long time but it will happen. Due to the limited supply released to the market daily, price would be much higher than what it is now and hardware would also be more efficient.