Mining after subsidy, what's the long term plan?

[adamstgBit]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

[mtnminer]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

As we are currently progressing the last mining reward will be around 2136 is most likely beyond your on my lifetime.  Presumably Bitcoin prices will continue to gradually increase making the monetary return greater even with less coins being yielded in return.

I am sure eventually transaction fees will begin to be divided between the pools and the miners, but we are a long way from that time.

Mtnminer

[adamstgBit]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

As we are currently progressing the last mining reward will be around 2136 is most likely beyond your on my lifetime.  Presumably Bitcoin prices will continue to gradually increase making the monetary return greater even with less coins being yielded in return.

I am sure eventually transaction fees will begin to be divided between the pools and the miners, but we are a long way from that time.

Mtnminer

 

and thats why i own bitcoin

more or less guaranteed to double in value every few years

[aarons6]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

As we are currently progressing the last mining reward will be around 2136 is most likely beyond your on my lifetime.  Presumably Bitcoin prices will continue to gradually increase making the monetary return greater even with less coins being yielded in return.

I am sure eventually transaction fees will begin to be divided between the pools and the miners, but we are a long way from that time.

Mtnminer

 

and thats why i own bitcoin

more or less guaranteed to double in value every few years

there is NO guarantee..

[RealPhotoshoper]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

i think,long term plan for transacton fee will decide after bitcoin halving,i wish not too significant if transaction fee must be rise,because the on of many benefit to use bitcoin is lower fee than other payment,it should be defended.

[Kakmakr]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

As we are currently progressing the last mining reward will be around 2136 is most likely beyond your on my lifetime.  Presumably Bitcoin prices will continue to gradually increase making the monetary return greater even with less coins being yielded in return.

I am sure eventually transaction fees will begin to be divided between the pools and the miners, but we are a long way from that time.

Mtnminer

 

and thats why i own bitcoin

more or less guaranteed to double in value every few years

I love your optimism and positive outlook on this, but I doubt that this will happen. There are loads of competing technologies in the form of Alt coins and also lately < Private Blockchains > being developed. This technology are one of the main threats to Bitcoin and it might not even be around within the next few years. Satoshi probably thought his technology were bullet proof, and banks would never steal his idea and use it against Bitcoin, but they did. Greed has no limits in this world.

Some people seem to believe that Bitcoin could cannibalize any good features from other Alt coins and adapt to change, but would consensus for that change be reached, if we could not even get consensus about a block size increases for years. ^hmmmmmm^

[Jet Cash]

Once we get rid of ( or reduce) the direct payment for finding blocks, we can see a shift towards transaction fees to cover mining costs. This will make the large mining farms uneconomic, and we can see mining becoming a more distributed function as nodes start to mine, and the service providers join in to mine blocks. This will make Bitcoin stronger, and should cut out all the damaging actions like the blocksize power grab.

[exstasie]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

Mass adoption and perpetual growing stream of demand are not guaranteed. Many things can happen between now and then, but important thing is keeping bitcoin functioning. And we should build to scale for that demand, but we don't have the tools yet. Sophisticated smart contracts are a big stepping stone to building new trustless layers that are more scalable than just a broadcast network.

But I digress. Since mass adoption and perpetual growing stream of demand are not guaranteed, an active fee market is the only way to guarantee fees to miners who will secure the blockchain (absent subsidy). The optimal limit to achieve that--with consideration for decentralization--is well, debatable. We can't say what future transaction usage will look like but we can look at the data we have. Average block size is around 700kB, not approaching the limit for some time, meaning we haven't really even seen what a functioning fee market looks like. If we were at capacity, the mempool wouldn't be fully cleared out several times a day. BUT at least we see the transaction volume is steadily growing, and that says good things about the future---but of course that makes no guarantees. The 80/20 rule says most of that volume is created by few entities, probably lots of spam (recycled, dust) transactions, so it would be interesting to see what market actors do in a fee market. Halving is a great time to start thinking about these things IMO. Halving = reduced subsidy = reduce cost (vs benefit) of double spend. How juicy is increasing capacity (for lower fees) when we aren't really at capacity to begin with, for miners? Bringing back free transactions for a short while might sound cool but it's not gonna solve bitcoin's scalability problems or its lack of fee incentive for miners as time goes on.

Segwit will set that back even further by keeping fees low. But if users are really concerned about low fees, well, maybe there is room for that--to the extent that it is SAFE. Not forcing nodes off network en masse, not choking smaller miners out with increased orphan rates. Meaning we need to optimize validation time, widen relay bottlenecks and reduce critical bandwidth needs....

Once we get rid of ( or reduce) the direct payment for finding blocks, we can see a shift towards transaction fees to cover mining costs. This will make the large mining farms uneconomic, and we can see mining becoming a more distributed function as nodes start to mine, and the service providers join in to mine blocks. This will make Bitcoin stronger, and should cut out all the damaging actions like the blocksize power grab.

Gotta remember though. This would make bitcoin a lot easier to attack, as the proof of work required to double spend/withhold/censor would be much less. I don't think we necessarily want to sacrifice security from miner attacks if we don't have to. A strong fee incentive would (hopefully) keep miners in line, doing nothing more than they are paid for = ordering transactions into blocks.

[Jet Cash]

Gotta remember though. This would make bitcoin a lot easier to attack, as the proof of work required to double spend/withhold/censor would be much less. I don't think we necessarily want to sacrifice security from miner attacks if we don't have to. A strong fee incentive would (hopefully) keep miners in line, doing nothing more than they are paid for = ordering transactions into blocks.

But if block generation times were down to one every minute, wouldn't this mean that these abuses would be detected and rectified fairly quickly.

[exstasie]

Gotta remember though. This would make bitcoin a lot easier to attack, as the proof of work required to double spend/withhold/censor would be much less. I don't think we necessarily want to sacrifice security from miner attacks if we don't have to. A strong fee incentive would (hopefully) keep miners in line, doing nothing more than they are paid for = ordering transactions into blocks.

But if block generation times were down to one every minute, wouldn't this mean that these abuses would be detected and rectified fairly quickly.

Hmmm, how so?

[Amph]

well the long term plan is to have an increase in the value to allow miners to have the same profit as they have right now from fee only

but it will not happen gradually, a big boom will increase dramatically the value one day to keep up with the loss of value for the previous years, or stagnant years

[aarons6]

well the long term pla is to have an increase in the value to allow miners to have the same profit as they have right now from fee only

but it will not happen gradually a big boom will increase dramatically the value one day to keep up with the loss of value for the previous there, or stagnant years

i actually believe in 100 years time computer tech will get to the point where you wont have to worry about how much a few bits of bitcoin is to mine it.

by that time if bitcoin really takes off, every electronic device in your house will have a bitcoin miner in it mining for the manufacture that made it.

[ATguy]

what should be the the long term plan for TX fees?

The long term plan is let miners not only choose fee policy, but also how many transactions they can include in one block. Whether it become adaptive blocksize adjustment or removed limit altogether is to be seen, but miners must be able to include as many transactions as they need, because just increasing fee is not option, people gonna just stop using Bitcoin instead so this doesnt help get more Bitcoins from fees. Moving transaction fees to other layers or sidechains just mean less fees  for Bitcoin miners (thus Bitcoin security), so unless miners hit technology to the max and no more onchain transactions possible to include, Bitoins transanctions and fees should be onchain as much as possible to keep Bitcoin secure with high enough hashpower even in future.

[Rubberduckie]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

As we are currently progressing the last mining reward will be around 2136 is most likely beyond your on my lifetime.  Presumably Bitcoin prices will continue to gradually increase making the monetary return greater even with less coins being yielded in return.

I am sure eventually transaction fees will begin to be divided between the pools and the miners, but we are a long way from that time.

Mtnminer

 

and thats why i own bitcoin

more or less guaranteed to double in value every few years

well logically it should double each time the difficulty changes/reduced block
payouts. Unfortunately bitcoin is still so new im more worried about adoption
over price

[nagatraju]

It won't end until all bitcoins have been mined by which point the transaction fees will have already outstripped the mining reward.

[adamstgBit]

once block subsidy runs dry miners will need to turn to TX fees in order to get paid for securing the network.

what should be the the long term plan for TX fees?

Mass adoption and perpetual growing stream of demand are not guaranteed. Many things can happen between now and then, but important thing is keeping bitcoin functioning. And we should build to scale for that demand, but we don't have the tools yet. Sophisticated smart contracts are a big stepping stone to building new trustless layers that are more scalable than just a broadcast network.

But I digress. Since mass adoption and perpetual growing stream of demand are not guaranteed, an active fee market is the only way to guarantee fees to miners who will secure the blockchain (absent subsidy). The optimal limit to achieve that--with consideration for decentralization--is well, debatable. We can't say what future transaction usage will look like but we can look at the data we have. Average block size is around 700kB, not approaching the limit for some time, meaning we haven't really even seen what a functioning fee market looks like. If we were at capacity, the mempool wouldn't be fully cleared out several times a day. BUT at least we see the transaction volume is steadily growing, and that says good things about the future---but of course that makes no guarantees. The 80/20 rule says most of that volume is created by few entities, probably lots of spam (recycled, dust) transactions, so it would be interesting to see what market actors do in a fee market. Halving is a great time to start thinking about these things IMO. Halving = reduced subsidy = reduce cost (vs benefit) of double spend. How juicy is increasing capacity (for lower fees) when we aren't really at capacity to begin with, for miners? Bringing back free transactions for a short while might sound cool but it's not gonna solve bitcoin's scalability problems or its lack of fee incentive for miners as time goes on.

Segwit will set that back even further by keeping fees low. But if users are really concerned about low fees, well, maybe there is room for that--to the extent that it is SAFE. Not forcing nodes off network en masse, not choking smaller miners out with increased orphan rates. Meaning we need to optimize validation time, widen relay bottlenecks and reduce critical bandwidth needs....

Once we get rid of ( or reduce) the direct payment for finding blocks, we can see a shift towards transaction fees to cover mining costs. This will make the large mining farms uneconomic, and we can see mining becoming a more distributed function as nodes start to mine, and the service providers join in to mine blocks. This will make Bitcoin stronger, and should cut out all the damaging actions like the blocksize power grab.

Gotta remember though. This would make bitcoin a lot easier to attack, as the proof of work required to double spend/withhold/censor would be much less. I don't think we necessarily want to sacrifice security from miner attacks if we don't have to. A strong fee incentive would (hopefully) keep miners in line, doing nothing more than they are paid for = ordering transactions into blocks.

+1

i find it odd that you see fee market pressure as the only way to grow fees pre block
wouldn't it be logical that adding more space to blocks will allow for more TX to be included on each, which will net more fees in total
many small fees Vs few large fees.
miners have incentives not to include TX that are free, the bigger their block the more chance of getting ophen due to slower progradation rate. infact often miners mine a block with 0 TX's included to make damn sure they dont get orphen under current circumstances ( this is part of the reason why you think that on avg blocks are only 70% full, if you remove 0 TX blocks i think you'll find we are much closer to capacity then you thought )

with the halving coming up, i think a good plan to grow fees will be necessary for miners. core's vision of a second layer greatly reducing traffic on the main chain is the last thing miners would want, no?

[ATguy]

i find it odd that you see fee market pressure as the only way to grow fees pre block
wouldn't it be logical that adding more space to blocks will allow for more TX to be included on each, which will net more fees in total
many small fees Vs few large fees.

Your logic is right because with higher fees some people stop using Bitcoin instead of paying higher fees. So you cant just expect runninng a sucessfull longterm business strategy to pay future Bitcoin security when you need constantly finding richer and richer ones using Bitcoin as the block reward is halving.

with the halving coming up, i think a good plan to grow fees will be necessary for miners. core's vision of a second layer greatly reducing traffic on the main chain is the last thing miners would want, no?

Hard to imagine poor ones will ocasionally settle funds onchain with future expected high fees, they wont use Bitcoin instead. It is like you had pay high fee like 10 USD everytime you want add funds to your debit card (to use on second layer) - poor ones cannot afford this for the privilege to use Bitcoin second layer.

Anyway if your the one fine paying 100 times current fees for onchain settlements, Bitcoin is for you in future as well according to Core roadplan. Source:

https://np.reddit.com/r/BitcoinMarkets/comments/48kf18/daily_discussion_wednesday_march_02_2016/d0krl0w

During the Hong Kong meeting, the answer provided by Core reps is that the future Lightning Network would increase capacity a thousandfold - that up to tens of thousands of transactions can be completed on the lightning network and settled with one on chain transaction. Assuming that current transaction fees are 0.3 RMB, and assuming that 1000 lightning transactions can be settled by one blockchain transaction, then we can raise fees for on chain transactions to 30 RMB (100x increase), while each transaction on the lightning network would only cost a tenth of current fees and increase miner revenue a hundredfold.

[exstasie]

+1

i find it odd that you see fee market pressure as the only way to grow fees pre block
wouldn't it be logical that adding more space to blocks will allow for more TX to be included on each, which will net more fees in total
many small fees Vs few large fees.

Yeah it will allow more transactions and therefore more fees, but there is no guarantee that this endless growth in transactions will happen. A fee market protects proof of work security whether or not this expected growth happens.

miners have incentives not to include TX that are free, the bigger their block the more chance of getting ophen due to slower progradation rate.

That goes for "cheap" transactions too. Relay improvements are in the works, and hopefully as orphan rates improve, incentives to mine full blocks do as well. Bigger blocks certainly don't incentivize miners who are already SPV mining to stop mining empty blocks, either.

infact often miners mine a block with 0 TX's included to make damn sure they dont get orphen under current circumstances ( this is part of the reason why you think that on avg blocks are only 70% full, if you remove 0 TX blocks i think you'll find we are much closer to capacity then you thought )

Actually it's generally done to minimize idle hash power during the time spent downloading and validating the previous block. The argument that dead pool miners make is that they help validating pools reduce orphans by quickly confirming their blocks with empty SPV-mined blocks. Respected pool admins like Kano say that optimized miner code and hardware makes any gains from SPV mining negligible. SPV miners should be optimizing their mining setups to mine full blocks -- and higher fees vs. subsidy is incentive for them to do that. But for now, fees are simply too low to matter to much of the mining network.

with the halving coming up, i think a good plan to grow fees will be necessary for miners. core's vision of a second layer greatly reducing traffic on the main chain is the last thing miners would want, no?

"Reducing" shows lack of perspective here. We could also endlessly increase capacity on main chain to make sure everyone's transactions are always free, but where would that get us? We need to find some compromise that does guarantee fees to miners (and it cannot stray too far from real validation/relay and ideally UTXO costs otherwise centralization pressures on nodes and smaller miners become problematic)

I think we should all accept that any major changes = trade-offs between growth and security. But you must leave time for us to minimize those security losses. It cannot just be "growth growth growth adoption adoption adoption new users want free instant transactions!!!" all the time.