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Author Topic: When the block reward approaches 0. How will the network be supported?  (Read 57 times)
KonstantinosM
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November 04, 2017, 11:03:42 AM
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All of this is simplistic. I don't understand the ecosystem like the experts out there do.
I just wanna know what the plans are for when the block rewards reaches 0.
This opens up a lot of questions.

The calculations below are practically meaningless, as they assume variables to be constant and come from a position of ignorance.
Transaction fees seem to be a small percentage of block rewards.
2.4/12.5 = 19%

Furthermore transaction fees then place a cap on the smallest transaction that makes sense for a person to use.

17173.12/2260 = $7.6 average fee per transaction.


So when the rewards drops to zero the average fee could be $7.6 * (5+1) = $45.6

So at about 1MB blocks and 0 block reward we have a $45.6 minimum to support the current network at current levels.

Does that mean that we'll need bigger blocks to make the network be supported by transactions?


Would at 10MB full blocks that average fee drop to $4.56
and then at 100MB fall to 0.46
and finally at 1GB fall to 5 cents?

At that point the blockchain would be growing at about 144GB per day if the price remains constant.

But if the price went up, fees would go up, so the blocksize would need to go up for fees to remain the same.



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November 04, 2017, 12:18:46 PM
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So when the rewards drops to zero the average fee could be $7.6 * (5+1) = $45.6

So at about 1MB blocks and 0 block reward we have a $45.6 minimum to support the current network at current levels.
You are looking at it entirely the wrong way.  When the network is no longer supported by the block reward and instead by transactions, it doesn't mean that the transaction fees have to rise.

There's nothing particularly wrong with a decrease in the amount of money flowing to miners.  Gradually, the miners' rewards in BTC will most likely decrease.  If the fiat value of their rewards also decrease, all it means is that mining will be less profitable, so a lot of miners will pull out.

The system regulates itself in this regard.  When the rewards decrease, so does the computing power dedicated to the network. 

It still wouldn't be particularly concerning security-wise, because an attacker would still have to pay billions to orchestrate a 51% attack.

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