The future of bitcoin incentive in Mining

[kr1p]

Hi everyone,
I am wondering this about the future of bitcoin:
As we all know, bitcoin network security can only be achieved through a lot of mining machines all around the world. The incentive for miners is to get a reward in bitcoin while they provide hashing power.
As bitcoin network is capped to 21 million bitcoin, what will happen when we reach the cap as only a very small inflation is planned to emit new bitcoins then? I mean, what will happen to all these miners who provide a lot of power to secure the network if only a very tiny fraction of bitcoin can be emitted as a reward for them?
If miners who need to provide more and more power to secure the bitcoin network get only tiny fractions of bitcoin as reward when we reach the cap, that would mean the price of bitcoin needs to raise a lot to secure the incentive to mine for miners...In other words, at a certain point, if the price of bitcoin is too low, the miners will go away and the bitcoin network will not last.
What do you think about that?
Thanks for your feedbacks

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[kr1p]

Up

[Pan Troglodytes]

It is an interesting way of thinking. It is common knowledge that when the new coin part of the mining reward goes to zero, than the miners will get their reward from the fees. Miners generate income in USD. The reward then will be equal to a product of the quantity of fees (denominated in bitcoin) and the price of bitcoin in USD. Thus, we have three options:

1. if the price of bitcoin is sufficiently high, the reward will be high enough even if the fees are low and miners will keep on mining. Bitcoin survives.
2. if the price of bitcoin is low, than the fees will need to be high in order to keep the reward high. When coupled with a low bitcoin price, high fees will kill bitcoin
3. both bitcoin  price and bitcoin fees are low. Then, the miners will lose the incentive and abondon mining. Bitcoin dies.

So you are right. This analysis tells, that with low bitcoin price (cases 2. and 3.) bitcoin will die...

[Brian Goldman]

Bitcoin price can be considered to still be at it's infancy, so any amount of bitcoins you stack will hold massive value in future.

Also there are altcoins which are profitable to mine besides bitcoin, Ethereum (ETH), Zcash (ZEC), Monero (XMR) etc

[Ethan Becker]

In fact, Bitcoin mining is still profitable to anyone.

Let’s do math:

I buy 1 Antminer S9, which is the common ASIC miner : https://shop.bitmain.com/antmine...

Price : 1415 USD alone, + APU (APW3++) 105 USD, + import taxes, let’s say 300 USD = 1820 USD

Consumption : 1323 W

Power : 13.5 TH

Electricity cost : 0.25$/kWh (lower in my country, but I think it’s a medium value)

Let’s check the daily net income (electricity fees deducted) on this website : https://www.coinwarz.com/cryptoc... : 16.88$ / day on BTC, 19.50 on BCH

1820 / 16.88 = 107.8, so your ROI with these conditions are around 108 days. Not bad uh ? 94 days with BCH!

However this figure isn’t exact as a few parameters come in:

Estimated delivery date is End of January 2018, so you’ll start later and parametres would have changed
Every bitcoin mined and stored wil probably increase in value, so your ROI tends to be faster
Mechanical failure, electricity outage, internet disconnection, or anything could happen, reducing your uptime (it always happens something)
By experience, the most annoying point in mining bitcoin is the noise produced by the ASIC, you can’t run it at home. Trust me I tried and it’s simply impossible, you need a remote location to run it.

[bitart]

Don't think that bitcoin will die because of the miners, if they stop mining... In the beginning, bitcoin mining was done on a few GPUs (in the time of Satoshi), so the network can be run on a few capable PCs, ASICs, etc...
Some miners will leave when the Lightning network will start to spread and will reduce the number of the onchain transactions or at least will make the transactions way more cheaper compared to the end of the year 2017. This will reduce the income of the miners, so they will fight for their profit, I don't know what will come but we can expect anything starting from FUD campaing to network spam or anything we just can't imagine now...

[Clark13]

Hi everyone,
I am wondering this about the future of bitcoin:
As we all know, bitcoin network security can only be achieved through a lot of mining machines all around the world. The incentive for miners is to get a reward in bitcoin while they provide hashing power.
As bitcoin network is capped to 21 million bitcoin, what will happen when we reach the cap as only a very small inflation is planned to emit new bitcoins then? I mean, what will happen to all these miners who provide a lot of power to secure the network if only a very tiny fraction of bitcoin can be emitted as a reward for them?
If miners who need to provide more and more power to secure the bitcoin network get only tiny fractions of bitcoin as reward when we reach the cap, that would mean the price of bitcoin needs to raise a lot to secure the incentive to mine for miners...In other words, at a certain point, if the price of bitcoin is too low, the miners will go away and the bitcoin network will not last.
What do you think about that?
Thanks for your feedbacks

We might think several scenarios that will happen to bitcoin incentive in terms of mining as time goes by. When the price of bitcoin goes high, then we can expect that the incentives of mining will be big as well. But we cannot deny that there will be possibilities such as hoarding of bitcoin might happen. What will happen next? The supply of bitcoin will be lessen and miners will surely cannot gain the amount that they are expecting.

[Pan Troglodytes]

We might think several scenarios that will happen to bitcoin incentive in terms of mining as time goes by. When the price of bitcoin goes high, then we can expect that the incentives of mining will be big as well. But we cannot deny that there will be possibilities such as hoarding of bitcoin might happen. What will happen next? The supply of bitcoin will be lessen and miners will surely cannot gain the amount that they are expecting.

I think that if people hodl bitcoin (do not transact it at all) then after the coinbase reward for miners has dropped to 0 they would stop mining (because it wouldn't be profitable for them anymore), rendering in effect the whole blockchain obsolete. This will never happen though, because the moment it is starting, the price will start dropping and people will start selling, in effect providing the benefit for miners all over again.

So in effect it will be a case of dynamic equilibrium.

[dvillier]

Yes off course there is no doubt in that as most of the people these days are doing mining and earning a handsome amount in return as mining is the best option from profiting point of view. Same is the case with holding the btc in hand too like if the price goes down some consider it as a low number of demand in the digital trade as in the shape of btc.

[Romaniluna]

I think many antcoin with better digital than BTC and mining is very bad system for anycoin

[armarsterling7]

Hi everyone,
I am wondering this about the future of bitcoin:
As we all know, bitcoin network security can only be achieved through a lot of mining machines all around the world. The incentive for miners is to get a reward in bitcoin while they provide hashing power.
As bitcoin network is capped to 21 million bitcoin, what will happen when we reach the cap as only a very small inflation is planned to emit new bitcoins then? I mean, what will happen to all these miners who provide a lot of power to secure the network if only a very tiny fraction of bitcoin can be emitted as a reward for them?
If miners who need to provide more and more power to secure the bitcoin network get only tiny fractions of bitcoin as reward when we reach the cap, that would mean the price of bitcoin needs to raise a lot to secure the incentive to mine for miners...In other words, at a certain point, if the price of bitcoin is too low, the miners will go away and the bitcoin network will not last.
What do you think about that?
Thanks for your feedbacks

Bitcoin mining is becoming more and more difficult. There are a lot of bitcoins that have been exploited a few years ago and the algorithms are getting harder and harder. So the machines have to have algorithmic capacity faster than many times and the capital you have to invest in is a lot. The amount of profits you earn is not much and revenue will decrease. The future of the bitcoin industry will soon come to a dead end.