Incentive and computing power after 21 million is reached

[t1mm3h]

I was thinking about the incentives for miners. Now there are two incentives:a reward in newly created bitcoins and a (smaller amount) of transaction fees. At the time no new bitcoins will be created, and the fees are the only incentive, I guess it will be less motivating for people to mine. Which leads to (much) less computing power on the network and an increased likelihood of someone frauding the chain. What do you guys think of this?

[ScottJD]

I think about this a lot... what will happen to the network once close to 21m BTC have been mined. There is no reason to carry on mining and supporting the network.

[t1mm3h]

I think about this a lot... what will happen to the network once close to 21m BTC have been mined. There is no reason to carry on mining and supporting the network.

The transaction fees will be a reason to continue. But I don't know if this will attract a large group of miners (at least not as many as now). And if that is the case, the computing power on the network* will decrease, making an attack (fraud) more likely.

[Zaih]

One would hope that Bitcoin has become so wide spread that transactions would be going through at an insane rate. This would allow miners to make a considerable amount from TX fee's.

It's definitely worrying though.

[ScottJD]

Ahhh very interesting... Is it true the 21 million BTC are expected in around 2040?

[SALADNZ]

considerable amount from TX fee's.

Yes.

So why:

It's definitely worrying though.

?

[BurtW]

Ahhh very interesting... Is it true the 21 million BTC are expected in around 2040?

2140

[DannyHamilton]

- snip -
At the time no new bitcoins will be created, and the fees are the only incentive, I guess it will be less motivating for people to mine. Which leads to (much) less computing power on the network and an increased likelihood of someone frauding the chain. What do you guys think of this?

This won't be a sudden change.  The size of the block subsidy in the block reward will slowly drop over the next 127 years.  At the same time, the volume of transactions will (hopefully) be increasing.  When the block subsidy drops to 0 BTC, it will be dropping from being 0.00000001 BTC per block for the previous 4 years. If someone doesn't find it to be profitable to mine with a 0 BTC subsidy, they probably didn't find it profitable when the subsidy portion of the reward was 0.00000001 BTC either.  During the 4 years before that the subsidy portion of the reward would have been 0.00000002 BTC.

If the value of the transaction fees isn't enough to keep miners mining, we will slowly see the network hash power drop over a period of several decades.  That will be plenty of time to find another solution.

[TheSwede75]

I think about this a lot... what will happen to the network once close to 21m BTC have been mined. There is no reason to carry on mining and supporting the network.

The transaction fees will be a reason to continue. But I don't know if this will attract a large group of miners (at least not as many as now). And if that is the case, the computing power on the network* will decrease, making an attack (fraud) more likely.

moores law pretty much guarantees that with ASICS and transaction fees there will always be incentive and profitability in running the network and processing transactions.

[piecinitup]

So can someone explain the difficulty vs. the price of the bitcoin.  Even if the difficulty rises significantly if bitcoin goes up a lot it would still be worth mining.  or am I missing something?

I guess my main question is, is it worth investing in a rig (GPU) right now or just use the money to buy bitcoins?

[jackjack]

So can someone explain the difficulty vs. the price of the bitcoin.  Even if the difficulty rises significantly if bitcoin goes up a lot it would still be worth mining.  or am I missing something?

I guess my main question is, is it worth investing in a rig (GPU) right now or just use the money to buy bitcoins?

Buy bitcoins 

[DeathAndTaxes]

Well the block subsidy has already decreased from 50 to 25 so obviously the incentive for miners has fallen and the network computing power has gone down.  Er wait it hasn't.

[beoswind]

Buy or mine Litecoins not BTC

[jackjack]

Buy or mine Litecoins not BTC

Are you really advising a newbie to buy Litecoins? Stop your lame attempt to make him inflate this bubble even more.
The FIRST crypto-currency a newbie should be is Bitcoin. Period.

After hours of reading about their differences, their strengths, theirs weaknesses, their devs, their future development, then he can wisely chose whether he wants to risk money in one or more Bitcoin clones
Actually he should even buy Bitcoins only after all this reading

[natey1]

If the value of BTC keeps going up, anyone that holds a good amount of BTC will be incentivized to help out with mining to make sure their investment isn't attacked by having the network hash rate drop too low, but with the low power cost of ASICs people will just likely keep them plugged in for a long time

[pand70]

It is interesting that people care about what will happen to bitcoin after the year 2140 

[worldinacoin]

That is still a long long time away, lets party while the sun shines

[DannyHamilton]

isnt it like 2160 when 21 million is reached??

2140, but what's 20 years between friends?

[skippylou]

It is interesting that people care about what will happen to bitcoin after the year 2140  

MOST people don't.  MOST people are short term.  

I have a belief in reincarnation.  Not a very strong belief but there is some scientific evidence.  I don't really care about the fate of Bitcoins in 2140.  I do care if there is a civilization that even remembers the meaning of Liberty in 2140 but there isn't much I can do about it.

[g8bluSti]

It is interesting that people care about what will happen to bitcoin after the year 2140 

Hey if bitcoin takes off we can buy robot bodies or cloned organs and still be around then...  There has to be a decent amount of crossover between bitcoin enthusiasts and those who believe we're nearing the technological singularity.