Bitcoin Forum

Yes this headline turns some heads but hear me out:


The current block reward is ~300.000USD
Each block contains ~2800 transactions on average.
So far so good. That means that currently each confirmed transaction
is worth over $100. Later when there will be no block
Reward its expected that miners are paid by transaction fee.
But there is no way people are gonna pay 100$ Worth of btc per transaction.

Let’s be realistic and say people will pay 2$ per transaction. This is only 2% of the
reward of the current mining system.

In my understanding mining will shrink to 2% of the current hash rate. Otherwise it’s not profitable.
And this is very dangerous to the security of Bitcoin.

Correct me if Im wrong!

I specifically didn’t write any btc amounts in the calculation only dollar amounts. Since miners will pay their ASICS and electricity in dollar. That the value that matters.

The later you speak of, when there would be no more block reward is over 100 years from now; a lot would have happened between that period of time which would change the Bitcoin space from what it is now.

Since transaction fees are paid in Bitcoin, it would be best to describe it in that form.
If 0.000030BTC equals to just over a dollar now, it would be a lot different in price in 2140 (expected time of the last block reward).

Yes but my point is it doesn’t matter what the fee is in btc. If the fee would still be 0.000030BTC in 2121 but the fee alone if worth 100$ then you would not be willing to pay that. So it only matters what the fee is in $.

The network running at 2% of what it is now is still quite a secure network.

Any change that does occur could be quite spread out (over even 20 years towards the end - there'll be enough time to come up with a plan for how to address these shortcomings).

What if each block contains 100000 transactions instead of the current 2800, little infrastructure change is probably needed to change that (if any other than code and signalling). Each of those could pay $1 and overpay on the current system.

Also, if you're using bitcoin and you're a large bank, a small shop or anything inbetween, what's stopping you from storing your own version of the blockchain and hosting your own node and miner? Even if normal miners are expensive to run, there are solutions like sidehack's range that just run off a usb socket (normaly) and don't consume much power - although their current offerings are much closer to the usbc type power usage afaik.

There's no guarantee that $ would still exist 200 years from now or that it would still be the global currency or that Bitcoin would still be priced against it.
That's the reason for the 1st paragraph; the distance is too far off to find a solution now, as the reward continues to gradually reduce, the network would start adjusting for a time there would be no more rewards.

It’s about buying power. You have to use USD for this comparison NOW because it has consistent buying power. Bitcoin doesn’t. Usd will only be replaced buy something similarly consistent. If you get your paycheck and the next week you have half the buying power (like with btc) nobody will adopt that.

The is a problem with that already and you know it (Blocksize). Bitcoin isn’t made to last forever, and I am just now thinking about the future.

maybe bitcoin mining will not profitable aftert that big mining farm most likely gonna shutdown the operation and mining difficulty will down and more efficient hardware will come and home mining maybe showed up again

You are correct. However, it is not clear if $2 per transaction is sufficient or not. The current value of $100 per transaction doesn't mean that $2 is not sufficient.

Blocksize has physically been changed at least twice since Satoshi released the initial version of bitcoin. It's theoretically been changed another 2 times also with the two introductions of segwit and there looks to be a few proposals to change it again (with taproot and mimble wimble).

Miners are the only ones able to change blocksize, they're going to be quite incentivised to do so if the fees are paying well and people turn away from bitcoin - sha256 ASICs only work on sha256 and the only place you're likely to get paid with that is bitcoin and some forks.

Fewer competitors and less difficulty means that every miner with an installed machine will get a significant increase in profitability and more predictable income. All bitcoin miners share in the same economy and mine on the same network, so both public and private miners will see increased revenue,” said Kevin Zhang, the first major power plant in the US to start mining on a large scale, if you say miners are not making a profit, they will no longer want to mine.

It's not profitable because it's converted to USD.
If you convert it to another currency then you will also look at the economy of the country that owns that currency.
What if you can pay your electric bill in Bitcoin that is valued in Bitcoin only and not converted?

I don't even know why we are talking about this right now because there is a 100 percent chance we won't witness the profitability per confirmed transactions only without block rewards.   ;D

100 years is a long time, but we're expected to be experiencing the effects far sooner. There is no point arguing from the perspective that we won't be using fiat in the future because it doesn't make sense. No one wants to make a transaction with a fees that takes a large proportion of their transaction value. The argument stays regardless. Rather, I'm more inclined to think that the transaction volume would rise to compensate for it. It is simply impossible for the transaction volume to stay at ~7TPS or else we'll never attain mass adoption. The capacity of the network can and will increase, if we were to still use Bitcoin as a mainstream currency by that time.

This sounds like a good plan except that is it not true that the direction of development now is on layer 2 rather than on chain? I think the size is still a problem so they would like to restrict it on chain like that and keep those 100k transactions all on Lightning.

It will probably end up being no fees, but rewards being worth much more thanks to price.

Execllent.

This is the prime reason why there will be more "demand" and less "supply" in the upcoming period and this is why the prices for bitcoin will rise crazy. People don't understand the increase in value in the form of USD and fail to understand rest of the calculation. If you are mining the bitcoin then you are getting paid in btc itself. So its not about how much dollar? It's about how much btc's you getting paid first and then make the conversion later into USD.

With the increased demand the prices will hike for sure. Later we will need to care about how much each satoshi equals to dollars? The day will also hit us when satoshi would be over few dollars. This is not inflation, this is correction of the prices based on the supply and demand in the market.

As far as I have read this over many times, this is how its gonna be in the future. No miners will be left in the dark for nothing. They are there, that's why the transactions are getting confirmed.  So they will be paid today and all the time in the future in profits.

I don’t know about the calculation, but the opinion that miner profitability would be a problem when the block rewards are too small is a known problem. I asked the same question before, if the Core Developers would change the rewards structure without increasing the supply cap through a hard fork. But it was ignored and viewed as “stupid”.

It seems like you and Wind_FURY are the only ones that understand the problem, everybody else is just closing their ears and screaming: BLABLABLA THERE WILL BE NO DOLLAR EVERY DOLLAR COMPARISON IS POINT LESS
But fail to understand it doesn’t matter if it’s written in dollar or btc, I could write the transaction fee in potatoes…

The mining difficulty and hashrate can be adjusted,so miners can still make money.
The Bitcoin price might go up tremendously.I'm not the biggest "BTC price to the moon" believer in the world,but logic says that an asset with limited supply and increasing demand will going to cost more in the future.This is just common sense.
If Bitcoin mining wasn't profitable,then why all those BTC miners are still mining BTC?Do you have some conspiracy theory to explain this?Is it because China is controlling Bitcoin?Or the CIA?Or the reptiles? ;D

You are wrong and since you like to use USD values I'll give you USD values.
When bitcoin started miners were earning $0 per block. We fast forward to each time the money they earned was cut in half (dropped 50%):

• 2012-11-28 they were earning      $75 per block
  
• 2016-07-09 they were earning   $8,500 per block
  
• 2020-05-11 they were earning  $61,875 per block
  
• 2021-03-09 they are  earning $309,525 per block
  All the above values are with 0 fees per block!
  
  Although the price rise is not guaranteed but there is also no reason for the growth to slow down let alone stop. So historically speaking we have no reason to believe hashrate would drop just because profitability of mining bitcoin would decrease.
  
  You also make the mistake about hashrate; it doesn't rise only with price (profit miners make) but also it increases with advancement of the hardware used to mine bitcoin (ie. new and more efficient ASICs).

You're correct. Bitcoin, though, will always be profitable for some. It's just that the security of the network will decrease overtime.

But, Bitcoin didn't worth the same all these years. It's a false thought to compare 2012 with 2016 and then with 2020, 2021, unless you think that one Bitcoin will worth a billion dollars when the reward shrinks by a lot. If the price isn't doubling each halving, then the security will decrease.

Besides, OP didn't refer to the previous rewards, but when there won't be a reward.

So you are worried about things that could happen in the far future based on assumptions from today. You can almost only be wrong.

Just a quick scenario: average Joe will use off-chain transactions and basically only companies will send on-chain transactions, worth millions of $ per transaction. Now think again, do such transactions worth 100$ to be confirmed?
I don't say that my scenario is more accurate than yours, as I said, in 100 year a lot can happen. But I would not be worried now about such scenarios.

In order for the average Joe to create off-chain transactions, he has to open two on-chain ones except if he's under the control of another party. But then, isn't the whole system ruined?  :-\

That's my assumption.

But, the security will decrease a lot sooner than that. Sure, in 100 years each block will reward 32 sats, but what will happen once Bitcoin reaches $10-100 trillion market cap and suddenly the reward of the network cuts in half? Will the security drop by half or will the market cap double?

It's sort of a dead end.

Unfortunately I do expect that the channels will be opened between custodians. Indeed, not a great future for Bitcoin-as-a-currency, I know that too.


He-heh.. I've been thinking on such scenarios in the past and sooner or later all led to dead-ends or things we just cannot foresee. So I've stopped worrying and making scenarios.

there is no need to drop security.
no need to mess with difficulty
no need to pressure users to pay more per tx.

ASICS do not touch/handle/process/compute transactions.
the amount of transactions per block do not affect asics in anyway
more transactions does not require more asics.. nor less asics.

trying to say the mining cost is impacted by transaction amounts is FALSE

anyone can set up a pool and their desktop computer does the transaction computing..
they can then open their bandwidth to hundreds of thousands of asics to mine a hash for them
thats right asics only mine hashes. not transactions.
a pool manager does not have to run asics to make block templates
an asic does not need to make block templates to compute hashes

transactions and block fee's are not relational. they are just statistical after the fact.
so to all those trying to link a transaction as 'costing' $100 due to the block reward/transaction. you are creating a false narrative, as an after the fact statistic

..
now with that said. there are ways to get pools to continue on the same $$ income or increase their $$ income
without messing with security, difficulty, less hashrate. or other stupid idea's mentioned in this topic

a. bitcoin price doubles
    ai. if users pay half sat, pools get same $ income(users pay same $)
    aii. if users pay same sat, pools get double $ income(but users pay double $)
b. double transactions per block
    bi. if users pay half sat with twice amount of transactions, pools get same $ income(users pay less $)
    bii. if users pay same sat with twice amount of transactions, pools get double sat income(users pay same $)
c. make average transaction size less bloaty/more leaner
    ci. if users pay same sat/byte, with less bytes/tx(more tx per block), pools get same income $, users pay less $

we should not mess with network security. nor mess with reward supply. and also not mess with making bitcoin too expensive for people to transact.

promoting other networks is not the solution. as thats just breaking bitcoin, making bitcoin useless just to make a altnet fashionable.

the real solution is to allow more utility ON bitcoin. so that it dilutes the individual cost. ensuring bitcoin stays popular and desired.

There is simply no way that transactions are done entirely on lightning or on layer 2. That is unrealistic and makes Bitcoin completely useless and which is why I've criticized repeatedly on the fallacy of having a limited on-chain capacity and banking on off-chain TXes to sustain the TX volume. We absolutely need a capacity increase in the future to even think of mass adoption. Again, 7TPS is ridiculously small and lightning network isn't (and should not) be the solution to the problem.

Again, the problem we're looking at right here is not to ensure that we maintain the same level of security. The whole point of PoW is to make it more expensive to attack the chain than be honest. If there is a substantial security decrease but we're still looking at a huge discrepancy between the profits from an attack vs profits from mining, then there is no problem.

I think you've stopped, because you've realized that reasonably, it won't be secure in the far future; thing that you surely dislike, but you can't think of another possible scenario. Did I find it? Because, so do I.  :P

With the developing of off-chain solutions such as the lightning network, I don't find this a proper way of maintaining the security. Despite the fact that blocks' size has to touch the limit which will double every four years, there will be more off-chain transactions than the on-chain ones. It's not practical to have a dozens of terabytes weighted blockchain, because then we'll have to face other issues. (decentralization)

by off ramping utility away from bitcoin  is going to break bitcoin
because
1. less people using bitcoin daily = less people monitoring bitcoin(fullnode) daily.
    yep i said it people that only use bitcoin once every few months are not going to run a full node everyday

2. less transactions on bitcoin = more fees per user (repeat point 1) which also means less pool income

3.the way you word it. you want less transactions onchain so that there is no reason to protect the security of bitcoin. your wording it as if you want no one to use bitcoin and then say that bitcoin cant be secured because no one is using it enough to secure it

4. you also word it like scaling up bitcoin requires gigabyte blocks by midnight tonight.

(why oh why are the same altnet adoration brigade still promoting the outdated scripts(facepalm))

sorry but 20 years ago floppy disks were a thing. people were using floppy disks easily and thought that a 1tb hard drive was unimaginable.
yep i had a PC in 1998 that had a max hard drive capacity of 4gb. and a floppy drive for portable storage
now i have a 4 terrabyte hard drive and a 512gb usb stick, and i can now think that 1.44mb floppy is unimaginable to be useful in todays life

thats just a difference of 23 years

it has been 12 years since satoshi implemented the first laws of bitcoin. and even then he was estimating 4200tx a block.. yet in those 12 years we have never even achieved a whole day averaging 4200tx

so stop pandering to the altnet promotion of offramping utility to then have even more excuses not to progress bitcoin. and actually discuss bitcoin progress..(ill repeat. discuss bitcoin progress without advertising altnets like LN)

There isn't any problems with a sustainable block size increase. It is ridiculous to be relying solely on off-chain transactions for the average person. Just because off-chain transactions are better for smaller transactions, it doesn't mean that there isn't any need for on-chain transactions. The problem with bigger blocks is almost always over-blown. There is no such thing as decentralization when it has always been far better for an average Bitcoin user to be running an SPV client instead of a full node. Storage size is obviously getting far better, either in terms of storage density or costs so that isn't really the issue here.

Just by assuming a doubling of the TX per block, you're easily looking at 0.5BTC or more at peak periods. Bitcoin isn't even suitable for day-to-day transaction right now, so I fail to see why we can't bank on having more TX per block to solve the problem. Bitcoin's current difficulty and required resources is huge, and it is still increasing. So the security issue is really overblown.

It doesn't matter what currency you use the drop would still be from 102% to 2% be it dollars rupees or pesos.

Now, about the 2%, we're talking about an extreme calm situation, when we mine empty blocks when transactions are the lowest in the last 3 years. If we look at the graph over a longer period (https://bitinfocharts.com/comparison/bitcoin-fee_to_reward.html) you will see that it spiked to over 20%

https://talkimg.com/images/2023/06/12/Absxz.png

So to keep that income and the same hashrate assuming the same prices per electricity you will have to pay an average of 400sat/b at current prices, less if bitcoin goes up but the same thing in $ terms.
As for the profitability, we have a clear example, the March 2020 crash that triggered an instant drop in difficulty.

Aso at this point we're not counting energy expenses which are going through the roof in all countries, so I wound't expect the same hashrate at same levels, especially not with the cheap coal energy from China out of the picture.


Half of the network is probably now secured by $10k a piece machines that would blow the circuits in a lot of houses when plugged in yet we're facing a threat of centralization because of the $200 2tb ssd. Really?

Mining will always be profitable, even if it's quite low profit margins in your view. Bitcoin mining was implemented this way to distribute the amount of Bitcoin going in to circulation, and therefore the profit margins are determined by the amount of miners there are, or more accurately the amount of hash rate. However, in time the hashrate, and the amount of miners will likely fall, and while it might not be the 2 percent that you're predicting, the profit margins as the amount of miners fall will increase.

Although, I can only see the amount of miners falling as the equipment gets more expensive, which with advancement of technology might actually not be the case. Also, we'll probably see less miners once there are no block rewards, and only transaction fees as an incentive, but that's a long way away.

I think it's just a matter of time that it's increased. The only reason it hasn't been is because of the resistance met. There's still users here that will argue until they're blue in the face that Bitcoin is suited to day to day transactions though, but they usually don't realise they're resorting to off chain solutions rather than Bitcoin itself.

It has been increased, Segwit.

You're right. There are many users here that have argued that we don't need a block size increase and that any of that is just pure big-blocker bullshit. Well, some of them are but there is a real need for a capacity increase. I have my doubts that many of the Bitcoiners are willing to even use Bitcoin for their day-to-day payments. In a lot of cases, it would be far better to just use fiat than have to deal with the miscellaneous hidden costs incurred by trying to use Bitcoin.

Does seem like many of the misunderstanding on the topic stems from the poor understanding of what LN is actually intended for.

@NeuroticFish Thats a good point. But what @ranochigo says is much more valid. If the block reward is "only" 6000$ per block, and a 1Million dollar transaction could be forged for 100.000$ worth of mining equiptment and electricity the transaction cannot be trusted. But maybe its a good thing, that in the future big transaction cannot be trusted.

In my understanding its the mining pools that have the control so there are already 5 Pools that control over 50+% of the hashrate. So it doesnt matter that the pool itself is decentralized.

@franky1 your point "a" makes no sense, but "b" and "c" are valid.

Don't make me get into doubt/scenarios cycle, it's not a nice one  ;D
Actually I've stopped because it was either deadlock, either things I cannot reasonably foresee. It can be bad, it can be fine; we don't know; too many things will evolve hugely in that many years...


Beware, you get into deadlock. If such a transaction cannot be trusted, big companies will not do them, don't you think? No.
Some miners will get out of business. Some others will enter. I expect that the ones who made their homework and will have their own power for free will not be few and will keep the network safe. If that won't happen, Bitcoin will be dead; with the amount of money in it, I don't think that the big companies will allow that to happen. (loops inside loops inside... it's not easy...) So maybe big companies (banks too?) may start mining, even if at a loss? Possible that too. Or maybe in 100 years all electricity will be for free.

Yeah, I'm obviously well aware of Segwit, but it'll likely be increased further down the line. I also share that viewpoint. I actually believe that a lot of users here like to give the impression they're Bitcoin elitists and use Bitcoin for daily transactions despite it being inefficient in doing so. I'll be honest too; currently I'm mainly using Bitcoin as a way of storing money that I don't want in a bank, other than that I use fiat for daily transactions, which I would assume the majority of users here do, despite giving the impression otherwise.

It's still decentralised due to the fact that there's multiple pools with significant share in hash rate. Okay, it's probably not perfect that there's large shares coming from one pool, but it would only ever be a massive problem if they had over 51%, and retained that. Even if they did manage to do that, users would likely combat it by moving to other pools. Bitcoin might not be perfectly decentralised as in you'll always probably have monopolies or at least companies/organisations which control a large portion of the network, but it is a vast improvement over fiat.

Mining pools are gathering places for the miners, just a few pools have their own hashrate and it's not a case of them owning nowhere near 50%. The danger would be companies that are building their own huge farms and ordering thousands and thousands of miners, there are 3 companies that have over one hundred thousand of s19pro on order and they all do with investors' money, a thing the little guy has no chance of mimicking.

The bright side in this is that those companies have zero intention of harming bitcoin, once you invest millions in these you're not going to kill your golden goose over nothing.


Hihi, we will rely on large companies mining at a loss but God helps us if the blockchain will be more than the average Joe's HDD capacity as we will need people to pay 10$ a day to host a copy on VPS.
I would have preferred the things to go the way futurebit envisions  (https://www.futurebit.io/) but seems like the 400 million users blogs claim we have are not that keep on helping decentralization, and we could do it with only 5% of that number.


Honesty time:
- 1 purchase with bitcoin last month (moving coins, mixing them excluded)
- 5 purchases with a crypto card so we can count this as fiat
- 83 entries on my day to day card on the august statement

I doubt that 0.1% of the people claiming to use bitcoin are using it on at least a 1:10 ratio versus traditional payments methods.
And yet I think that there is no week when I'm not bitching about people not using bitcoin enough.... :-X

But, isn't it a temporary solution? What will happen once that increase isn't enough to cover the same security it did before a certain halving in the future? Unless we double the block size each halving and the miners always fill their blocks with others' transactions we retain the same security given that the price remains the same.

But none of the above will ever happen. There will always be empty or emptier blocks; there'll always be fluctuations in the market value.

Answering both:

Aren't we using a system where each user can verify by their own the validity? Sure, few pools control most of the computational power that is offered to the network, but the average person should always have the right to verify what they're receiving. If you make it too expensive, there's discouragement.

there has never been any campaign or group defined as "bigblocker", yes there has been social drama promoted by conservatives..
but most people actually want more transactions.. its only those wanting their altnets to be popularised that dont want bitcoin to prosper

the group that defined the term 'big blocker' are the social drama queens that dont want more transactions
these conservative types started the scripts and memes of "gigabytes by midnight" just to deflect away from the actual community desire of more transactions

segwit did not actually offer more transactions..
even satoshi in 2010 mentioned that bitcoin as it was then, able to offer upto 4200 tx per block. but due to transaction bloat(weighted scripts and new tx formats being added) it never achieved that.

if bitcoin stayed as a 1 input 2 output lean payment system. we would have more transaction averages. without any blocksize changes
yet by adopting lengthy script stuff to pander to custodians businesses. its hurt individual users ability to transact by bringing the transaction average to under 3000

this years average transaction size is not ~250bytes.. but instead its about 576bytes. thus halving the transaction potential of satoshis estimates 11 years ago

so while devs have pandered to offer "bigger blocksize". they still have put some cludgy code in to stifle the amount of transaction throughput that new weight allowance can actually utilise.
'bigger blocks, but only to fit the lengthy weight of cludgy scripts.. not for more transaction multiplying'

no one has ever advocated for more blocksize just to fill it with useless data at same transaction count average.. and yet.. thats whats resulted from segwit

the 'upto 4mb weight".. but then cludge to avoid upto 4x transaction count. making segwit NOT a scaling solution..
. also everyone knows the real purpose of segwit is a gateway transaction format compatible for the use of offramping users to other networks.

..
anyway.. another excuse conservatives want to ignore progressing bitcoin. is that some think more transactions will result in more spam of mixers bloating up the blockspace.
yet there is actually a solution.. yep code. thats the great thing about computers. you can make rules

the simple solution is to make it super super expensive for idiots to just spam the network re-spending 1confirm utxos, block after block.
adding a fee formulae thats NOT just foolish capitalism of "freemarket" (which is aimed at causing everyone to pay premiums). but base it on multiplying sat/byte by the lack of confirms

EG set it at 100 confirms.
and so if you have 1 confirm. you pay (1/100) = 100x
and so if you have 50 confirms. you pay (50/100) = 2x
and so if you have 100 confirms. you pay (100/100) = 1x

that way if your trying to spam a block every block you pay 50x more then someone that makes a tx every 8 hours 20mins. pays 100x more then someone that does a transaction every 16 hours 40mins.

they pretend that making fee rules is impossible.. yet real hard blockchain data shows that a legacy transaction is more expensive than a segwit transaction. thus proving they can make rules to treat certain transactions different than others

there are many ways you can make fee mechanisms to avoid spam, my example is just a small thought on all the possible measures to create a spam prevention fee structure
there are also ways you can make bitcoin more friendly to users to use regularly without the false narrative crap speach of "gigabytes by midnight" /bigblockers. by which more people will use it regularly to then want to invest and protect bitcoin.

..
oh and one last funny part of the conservative game plan.
they cry soo soo much that they dont want bitcoin used for coffee amounts (0.00005000)($2.50)
yet they want to break the most secred law of bitcoin.. the supply amount
they want to produce 1000x more units, purely to make bitcoin more compatible with an altnet because the altnet is broke unless they can break bitcoin to fit.

these altnetters are absolutely lunatics in all their motives to break, stifle and make bitcoin utility drop purely to offramp people onto their network.. and that stuff needs to stop.
bitcoin needs to progress.

anyway..
back to the topic.
if people are concerned about miner income of the transaction fee's.
offramping utility will kill miner income from transaction fee's
less people transacting=less fee's to consume
if they try to make fees more expensive per tx.. even less people will use btc. heck people will stop close sessioning their own altnet tx back to bitcoin and instead swap to altcoins as their altnet exit just to avoid bitcoin fee's. thus popularising altcoins and making bitcoin look like a crap coin no one wants to use

I don't understand. Why is everyone so particular about *maintaining* security? That is not the point of PoW. The point of it is to make it prohibitively expensive for any adversary to launch an attack against Bitcoin. It is NOT an issue until we reach the levels where it becomes critical and profitable for an adversary to attack Bitcoin. We are very far away from that stage.

I think it is both unrealistic and unreasonable to demand the same level of security at all times. The resources needed to attack Bitcoin is astronomical at it's current stage, to the point where it is ridiculous to be attacking Bitcoin, and we still have block rewards. I don't see the need for block size to be increasing because there is nothing to be compensated for. Bitcoin is secure enough at the current stage, and it would suffice to have a linear increase for the near future.

We are. I don't think the argument here is to make it prohibitively expensive for normal people to run a full node... I think you misunderstood my "sustainable" block size increase?

Let's be a bit more pragmatic. Would users prefer to run full nodes over an SPV node at it's current stage. Full node offers virtually little to no benefits to most and the security/privacy of it is overblown. There is simply no reason for people to still be running a full node, unless they intend to run a full node without any tangible benefits to themselves. At that point, then it probably wouldn't matter to spare a couple bucks more to get a larger storage.

Having lesser people run full nodes isn't a problem. It only becomes a problem if it becomes centralized to the point that it poses a threat to the network. Full nodes are important, I never denied that. A capacity increase doesn't result in the majority of the users that were previously interested in or otherwise able to run a full node to suddenly not be able to do so.

Technological improvement has made manufacturing cheaper, and in a larger storage density. It simply doesn't make sense for us to not be keeping up with it as well. 1MB as a limit was arbitrarily defined, and it stuck for so long before Segwit got activated. Even the SW block sizes are underestimating the true capacity of the network.

miners income is more relational to the bitcoin price
if it cost people $2 you mine gold in their backyard they would happily sell it for $6 and 3x their investment. and gold around the world would average $6 on markets
because it costs over $1000 to mine gold they are selling it for $1600+

same with bitcoin. the PRICE is more of a factor than the sat amount they can grab
even as the reward halves or if the fee's halve the miners would just hoard until the PRICE satisfies the cost.

transaction count has absolutely no relationship to security.
a 500byte block. a 5kb block, a 0.5mb block. a 1.5mb block or even a 4mb block. changes nothing for asics.
they just receive a 256bit hash. and thats what they compute.

the desire to increase transaction count is not about security. its about utility.
actually making bitcoin useful

bitcoin in 2014-15 was doing great, thousands of businesses were accepting bitcoin. but now its at a point where hardly any business wants to adopt bitcoin and instead are adopting other altnets

Bitcoin fees will be high, $10-20 on average with spikes to even higher levels, purely because the block space will always be very limited while the demand will grow. On chain transactions will not be used for small transactions, they will be used for oening LN channels or making large transfers, in both cases paying today's equivalent of $20 can be justified.

Yes, for now transaction fees are not enough, and moreover I don’t think there is any payment method where you will have to be something more than for a little transactions, unless for huge amount of transaction. For now the way that miners can be making their profit is through the reward they receive from mining and the transactions fees they are getting can be a bonus.

By the time all the bitcoins are mined, which is going to be a very long time, there will be a solution to how miners are going to profit from the market. And by the way, by then there will be lots of transactions on the blockchain, and maybe the mining wouldn’t be as difficult and energy-wasting as it is now.

With all the current calculations, you must not forget when you want to sell the coins. Many calculate the values based on current rates, but few really sell directly after mining. Some trade, the others hodln and others invest in more hardware. Important are the costs for hardware, electricity and storage. This question will continue to ask many, the goal of the coins is hodln and use at the best possible price.

A fair amount of people consider it the next store of value that will replace gold. It's generally considered something that will belong in the next societies due to its innovation; if you don't care, even to an excessive degree which I disagree that that's how I seemed, how will you convince me that it, indeed, has future?

My point is that they aren't astronomical or won't be in the long term. If the security, let's say, drops by 50% in between two halvings, it quickly becomes far easier to be attacked.

It is hard to pin down the valid way for Bitcoin to work properly mainly because each user sees it differently. If you ask me, I find it more than just a benefit to run a node. If you want to own Bitcoins, the keys aren't enough. You have to somehow verify that you transacted. Having someone telling me that I did defends its purpose.

Again, the way Bitcoin should work from the user's side is meant differently between its users.

I agree that it was an arbitrary choice. It's advisable to state that if we changed it, the new block size wouldn't be arbitrarily chosen, but calculated from much more factors than Satoshi did twelve years ago.

Maybe it wouldn't be profitable enough when you can't even build a rig that couldn't mine transactions efficiently, particular with the energy consumption. That's the a huge factor that affects our ROI, because some other mining farm used energy efficient mining equipments that competes with the evolution of cryptocurrency.
For those who mined transactions using less efficient than rigs, I guess they're struggling on overheads instead of earning much higher profit.

^ The number one problem of all miners is the energy source that they use in mining. If you have a high electricity bill, it is not ideal to pursue your in a crypto mining business because that is not worth it. I don't know technically how BTC being mine but for me, the energy power source is the main problem of those miners. I have a friend who said, it is better to mine altcoin because it has a big profit than mining BTC.

The concept was when all the coins are mined the miners would sustain with the transaction charges alone and the logic is bigger blocks to include more transactions so that the miners will have a fair share of the revenue. The difficulty in mining is a good aspect because it determines the strength of the network, but i still cannot understand what is the energy wastage because when you are powering a decentralized economy you need to spend energy to maintain the network and you cannot call them wastage. It is like asking the baking sector to shut down half of their branches to save electricity :P.

BTCitcoin is meant to be transacted and not hold till eternity. It is a game theory where the miners are spending money to maintain their farm and they cannot hold all the coin and they will be forced to circulate the coins in the market to maintain them unlike POS coins where you stake the coins and when you think you want to book your profit you can move on with the investment to other pastures. 

As in, there is no need for us to maintain the security or the difficulty of mining. The point is that: yes, it is great for us to make it more difficult for attackers to attack the chain. It only becomes an area of concern if you look at the chain at any point and tell me that it is easy for someone to attack it. As of now, that is not the case. We're still looking at the difficulty increasing at the current price and a limited block rewards.

It has never really been the case at all. Each of the halving are so far spaced apart in time, there is always a more than sufficient time to ensure that the compensation is sufficient such that the difficulty drop is less than proportionate. As each of the halving are 0.5x the block rewards, you will start seeing the rewards being a lower composition of the miner's income. Subsequent halving should still result in a less than proportionate difficulty drop.

Yeah. I didn't really meant to say that a capacity increase should result in the majority being excluded. Simply no point to make up even more excuses to not make any improvements.

I'm not comparing anything I'm just showing the trend and those prices are reported by the time of halving. Feel free to use any average price you like to see the same exact trend.

Also if you read my following line after the dates and prices I say that this is a trend that we had so far and there is no reason for it to change in the foreseeable future which is the next decade or two at least. What we can't predict is what will things be like after 100 years, saying anything about it is meaningless in my opinion.

Indeed, you're picking dates between different halvings and compare the miner's income based on the price of each day. The problem with those examples is that the price was heavily fluctuating. Each halving affects the supply decreasingly compared with the previous one. If you notice it, the first halving made the highest increase, from $10 to $1300.

If the price keeps moving that way in each halving, yes, the security remains the same (or increases). But, the price won't keep moving likewise and I believe we should take it for granted that after a bunch of halvings in the future, the price will start stabilizing. The more the market cap becomes, the more the stabilization.

So, I repeat. If the price stops being so volatile, the computational power offered to the network will slowly decrease. This will happen sooner or later whether we increase the block size or not.

If you can predict what will happen in the far future based on the present's constants and you prefer not to, then it's inability to face the truth rather than meaninglessness.

In the first halving, the price did a 130x. In the second, a 10x and in this one, a 7x 'til now. That's why it has never been the case.

Help me understand. The resources used in PoW is a function of the income acquired from mining. If we were to assume that the price remains stable, then why wouldn't a capacity increase result in an increase in the fees. The main deterrence with Bitcoin achieving higher utility is only with the capacity as it is closely related to the costs per transaction. The transaction in Bitcoin is highly elastic, a change in the fees would result a greater than proportionate change in demand. If you were to accommodate more TXes per block, then it is not out of the realm of possibility that you will one day be able to substitute the block rewards with the fees.

The computational power is not a good metric to compare with the security of the network*, you will need to be looking at the costs of it. It is also not a good metric to compare using the previous halving. I'm estimating the block rewards to at least,be comprising of 8/10 of the miner's income at best, perhaps 9/10 at worst in the near future (within the next few halvings). You will see a smaller decrease in the drop in hashrate in the future, because fees start to compensate for the decreasing block rewards.

It has nothing to do with how Bitcoin's pricing being volatile or on an upward trend. There will be a point, in the future where the hashrate will stabilize, or at least have negligible change due to it. Fees are supposed to balance out the block rewards in the long run, you will absolutely be able to mitigate any issue with regards to the security if you are able to and want to increase on-chain capacity.

Even with the fees being a very minuscule part of miner's income, with the prices and improvement in efficiency of ASICs factored in, I'm still seeing a relatively stable hashrate throughout the past few halvings, latest halving being 2.74x. Again, think about how much better we can cushion it if fees were to form a larger percentage of the income.

*Ultimately, there is no good way to accurately measure it. So any predictions has to be done on a set of assumptions.

What do you mean by “capacity”? The capacity of the block? If we increase its size, the median fee will decrease. The miner will be able to accumulate more coins than before and the users will pay less, since their transaction will take less space.

The miners will someday, indeed, substitute the block rewards with the fees. That's obvious. The problem is that while their reward cuts in half every few years, they'll earn less coins and thus, they'll have less incentive to secure the network. It doesn't matter if a miner earns 1 BTC from fees plus 0.09765625 BTC as a reward. The fact that they'll earn less and less overtime means that the resources used in PoW will drop off. And that's true if we assume that they'll fill each block with transactions while the price, of course, remains stable.

For instance, what will happen if there aren't enough transactions in the mempool? If the miners' income depends mostly on the fees, then there're lots of factors that affect the practicality of Bitcoin.

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I didn't want to mean that the system will corrupt at some point in the future, I just want you to confirm me that the incentive will decrease over time and therefore, so will the security.

That is actually quite a common misconception. Most people don't consider the elasticity of Bitcoin transactions when considering on-chain volumes. Bitcoin transactions are very elastic, if it doesn't prove to have far more benefits than other payment methods, they won't use it. This is the main issue that we're seeing right now. Price of Bitcoin is so high, yet actual transaction volume and real life usage is far lower than it should be. Fees has been high for a long time and it is obvious that the network won't be able to sustain larger TPS, and users have to resort to paying more fees, and at times waiting quite a few blocks before confirmation.

4 years is a long time. There is a point where smaller sub-groups of miners starts to drop off as soon as it becomes less profitable for them and reaching an equilibrium thereafter. There is a reason why the decrease in block rewards is the most significant at the start and starts to taper off as we reach more milestones. At no point in time, will we ever see 50% of the network drop off solely due to the block rewards being halved, so long as we're able to scale on-chain.

In 8 years, if we're facing a problem where we still don't have enough on-chain transactions or still cannot meet the needs, then I suggest that we should just ditch Bitcoin as an experiment.

I don't agree that the incentives will decrease to the point that it becomes a threat to Bitcoin's security. The block rewards will decrease over-time, that isn't really disputable. Just look at the numbers. I don't agree that the drop in block rewards cannot be cushioned through other means.

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I'd just like to seek your understanding on this concept; There is no reason for concern until we reach a point where it becomes easy or feasible for an attacker to attack Bitcoin. Do you agree?

The first four years were a lot of time, when we brought into circulation 10.5M coins. The second four years were also a lot of time as we brought into circulation 5.25M coins. As time passes, the four years after a halving becomes less effective if you assume that time is what affects the supply. For instance, between 2036 and 2040, the supply will change by 82,031.25 BTC which is sixteen (!) times lower than this epoch's change.

So answering to this:
It is clearly a cause of the supply and the demand. Once the supply affects lesser over time and the demand will have reached a global scale, there won't be any milestones. There'll be stabilization. Thus, the drop off of those sub-groups won't be temporary.

As far as I've understood, they re-enter the game due to the price increase. Their earnings are far more than their costs.

There will probably be lots of on-chain transaction with or without the development of off-chain solutions that satisfy mainly micro-payments. What are the needs you're talking about?

I agree that it may not become a threat to Bitcoin's security. I disagree that I should make my assumptions by looking the numbers during the first years of its appearance.

Do you agree that we should discuss about this possible scenario as a community and acknowledge our options? Even if it might never be feasible for an attacker to destroy Bitcoin that way, shouldn't we cover the arguments that go against it?

At least, if we're supporters of it.

The reason being, there is no volume expected in the early stages of Bitcoin. The supply schedule is designed to compensate for being the only revenue for the miners and when it matures, then fees becomes the primary factor. As you've said, since there is a stabilization, we're far less likely to experience sudden drastic drops in hashrate as we go through each halving.

My point about "4 years being a long time" is that it is sufficient to explore capacity increases in every epoch. It is possible to try to increase the capacity (and the block rewards) to cushion, not eliminate the impacts of a block halving.

If there will probably be lots of on-chain transaction, then why would a lack of transactions be a problem? There will be an equilibrium for the miners as well.

The needs are the demand of the users.


I do. So far, the consensus mainly maintains that it isn't a threat, economic wise. There is nothing that you can really do. The only solution out of this is to break the 21 million cap and maintain a tail emission system such that you don't get any supply-shock from a sudden drop in the block rewards. That is, if you assume that the fees aren't sufficient to cover this. So we'll have a fixed inflation every year, kind of like Monero.

If not, then there is nothing you can really do without radically changing Bitcoin. Bitcoin has a fixed market cap, and if you change that then you aren't using Bitcoin. It is more of a non-issue and I believe that there are still quite a bit of misconceptions about how fees dominated mining income would play out. My primary argument against these kinds of paranoia is that, the current scheme actually works. If we want to ensure that the Bitcoin network today consumes more of that yesterday, then that is never going to be realistic.

If you can repurpose the heat that comes out of the mining rigs, probably you will be able to make some way to save your money and have a profitable mining. Or maybe you can make a way to have a free electricity, you can try installing a solsr panel that's exclusive for home use if you're on a budget or you can do the reverse and invest in solar power for your mining.

- Bitcoin needs to at least go down to create an ideal environment for miners to revive their mining power and speed but since the historic collisions in 2018, bitcoin has no longer had the opportunity to go down too much, the river of bitcoin mining history has since disappeared little by little, equipment is damaged and liquidated quite a lot by old miners, new miners are also unlucky due to high demand for graphics cards, initial costs have been inflated. Now that bitcoin mining is very trickle, devices are also turning to altcoin mining areas with more computational potential

I think it also depends on a geographical standpoint on where the mining business resides. Obviously, if the mining equipments are placed on a cooler and breezy environment, that would reduce pollution and energy consumption. Now, for the fees, mining will always be on demand due to the number of transactions that take place everyday. Even if the prices of BTC skyrocket in the near future, lower and lower denominations of BTC would be required but its amount would be equal to around a couple hundred of $$$.

I remember there was this mining company where they placed their equipments on a mountain in order to reduce the heat garnering from the equipments.

When Bitcoin mining gets unprofitable there are 2 things that can happen to change that. 1) The Bitcoin price can go up and make it more profitable. 2) Miners can stop mining Bitcoin and that makes it more profitable for the rest of us.

If Bitcoin isn’t profitable enough for you and you don’t want to quit or hodl til the price goes up, get cheaper electricity.

Since 2018, mining activities were decreasing because many miners commonly consider that the result from mining is smaller and smaller again.
Many small miners decided to close their mining activities, moreover selling the mining tools and equipment.
Well, this may happen because of the smaller results got.
However, if they are big miners, maybe they still have a good chance, moreover, if they believe that mining can really give them something good in the future, they will be still continuing.

Totally agree that the profit generated from Bitcoin mining is getting smaller nowadays, therefore many Bitcoin miners decide to stop and sell their
mining equipment. The profit generated from mining is not enough to cover maintenance and electricity costs. Forcing Bitcoin mining will only make us
lose more money than we make money. It's not surprising that more and more cloud mining scams are finally happening. So now to make money
in the crypto world, it is better to trade or staking than to risk mining Bitcoin.

Your argument seems reasonable but consider the fact that the technology of devices is improving over time. Mining devices are more powerful, consume less electricity. Renewable energy will also play a big part in the evolution of miners' equipment. One thing I am sure of is that mining will stop if miners lose money so they will always find a way to fix it.

as long as there is still something generated from mining bitcoin and it has a value of course mining will still exist, even though it may no longer be profitable in large numbers.
it's also like the situation when bitcoin didn't have as high a value as it is today. Miners will only get a small value from the bitcoins they mine. but the orientation of the miner must be for the long term. and now it has been proven that they are still profitable.

bitcoin mining is not profitable enough, if we look at the expenses made by miners, it could be said that bitcoin is not profitable enough, because electricity costs are expensive, people who do mining have to spend a lot of capital, sometimes the profits they get are not in accordance with their expenses .

I do not disagree that on chain capacity needs to be more but just from what I can gather from my own observations that everybody seems to be building on L2, as long as,,, on L1 when they finalize the channels they can be sure of security and permanence. Which is still the biggest strength of Bitcoin as opposed to Ethereum and others all popularly using L2.

I do think the level of security is high enough that it does not need to be much higher, just as you say to make it too expensive to attack. But it is not just about hashpower also but the diversity of hashpower that is important.

L2 and L1 are fundamentally different. L2 is suitable for smaller transactions while L1 is suitable for larger transactions, which makes far more sense. L2 cannot scale without the base layer being expanded as well. We will always have on-chain transactions when opening or closing the channel, which will happen far more frequently than you think. Lack of transactions on-chain will probably not be due to the popularity of L2 for years to come. There are still various hurdles to overcome.
Mining is as decentralized as it gets, anything that favours economy of scale will also result in centralization. That is a fact. The security would primarily be regarding the costs of attack rather than how decentralized it actually is. If it is not desirable to attack at all, then it simply won't happen.

If bitcoin wound't be profitable we would have nobody mining and the blockchain would simply stop, but the reality is that we have a million mining gear up and running, which invalidates your 2 seconds of thought theory.


Irrelevant and it's not quite true, efficiency has grown but overall energy consumption has also gone up you can have 100 times more efficient gear tomorrow if the price doubles so will the energy consumption.


Nope, renewables are not reliable, not providing energy 24/7, and can't compete in costs with traditional fossils unless subsidized by the government.


That's probably the only real way to approximate the security of the network would be to look at the average price for the hashrate.
Just because the hash rate is 1000 times higher than what it was in 2014 doesn't mean that the network is secure 1000x, if we look at the average back then it would cost nearly $1k to get a TH out of S3s, not you can get it for under 100$. I would rather look at the security of the network from the reward per day perspective rather than the hashrate because at the end of the day it's the first that dictates the latter.

As for the stabilizing part, in the long run, I think energy prices will matter more than asic prices, and the future doesn't look good at all.

True, bitcoin mining is not profitable because the cost is higher than the results we get, I hope there is a combination of large factories such as Intel, Mitsubishi, Philips or others that can produce mining tools so that they are more effective and efficient

I agree that L1 confirmation (as I said to finalize the channels) will be happening a lot more often than people imagine,,, which is actually proven already with Ethereum (when looking at Polygon for example), when people have L2, it seems they are more willing to conduct more transactions. For example separating 10 items on individual orders as opposed to batching 10 items on one order, so the myth of L2 pulling away business from L1 is already not true (people still make the final order regardless).

What I meant about reduction of hashpower is that if people leave,,, generally only the smaller ones leave, those whose profit margins are not as good as bigger companies. So a problem might arise if smaller players keep leaving, and only big ones are left. So we can deal with hashpower reduction but diversity might be an issue.

Because bitcoin is already very trendy now, at the beginning of the release of bitcoin, the profit in mining looks small at first because the price is still cheap, if you are a miner 3 years ago you must be a rich man now, because back then mining bitcoin had a lot of rewards, if now it is very difficult, and yes it is less profitable to mine now.

I think you are right, BTC mining is quite expensive and I can't imagine that a lot of costs for BTC mining, fuel as well as monthly fees associated with environmental pollution From this problem, many places do not allow BTC mining. BTC mining will become more and more difficult and profits will gradually decrease, not enough for monthly payments.

for long time now Mining integrity to bring profit is always been questioned but people don't really understand how this work . there are many countries in which not advisable for mining .
but there are some that makes this good for like in countries that has very cheap electricity in which good for miners.
You know that it is not that what the topic says.  try to read at least the full details and then reply.

At present the miners have the opportunity to mine 144 blocks on a daily basis which is basically 900BTC which is around $43.3 million dollars and these big miners will be willing to update their mining rigs if they think it is outdated and it has become a competitive space and that is what it should be, it is a capitalist market where anyone spending more money will reap more ;).

Thats quite true. Today coins like BTC, ETH etc are not profitable in terms of mining. They need specialized Hardware that eats too much electricity. Those who can afford such expensive BTC mining devices and electricity bills go for Bitcoin mining.
There are coins that are profitable and can be mined on ordinary devices like MASS (https://bitcointalk.org/index.php?topic=5230593.msg53968700#msg53968700) for instance. We have to search for such coins, since BTC mining is getting centralized to people with huge money.

On a small scale it isn't profitable for sure but if you still want to make some profit you will have to scale up on your mining rigs and possibly setup your mining farm in a place where electricity is cheaper to maximize on your profits.

Also trying to do away with bitcoin can be the right choice as other altcoins are available for mining which could be more profitable and cheaper to mining with lesser resources to commit.

Don't worry, after 140 years, hardware devices will become very cheap. 2 dollars can get a lot of hash power. So BTC is still safe.

We are not the only ones thinking about expanding and upgrading the house of bitcoin mining rigs, the owners of the old bitcoin rigs also know how to improve and preserve the daily bitcoin mining volume and a newcomer who wants to compete for this land is only doing more damage to themselves, besides, because this industry is no longer gloomy, the new owner of the farm needs to invest many times more capital than the old farm. Other crypto have more commitment, the competition is also very amateur and there is still a lot of land and some projects have unlimited traffic like ethereum

There are tricks in the profession that we don't know. Miners always have their own calculation to get the highest possible profit. ASIC devices are increasingly improved to provide high performance and lower power consumption than previous generations. If they lose, they will stop their work.

I think for those who are already professionals in mining, of course they have prepared many things, it is possible that they can cover all risks more readily so that they can gain profits from mining. From a general point of view, it does look very expensive in spending, and not to mention other risks, but there is definitely still a gap to get good results, it just needs very high capital.

as of now bitcoin mining is not that profitable now because the amount of bitcoin you can mine is very little, and the amount of power and resource you need to mine is very large so the amount of money you need to spend to mine is much more than the amount of money you can mine in bitcoin.