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Author Topic: when all bitcoins are mined, then what  (Read 2046 times)
4u2
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February 10, 2011, 07:11:54 PM
 #1

When all bitcoins are mined, why would people set their computer to do computational work required in the p2p network?  Are bitcoin owners required to pay transaction fees in the future to reward for this?
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jgarzik
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February 10, 2011, 07:31:00 PM
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When all bitcoins are mined, why would people set their computer to do computational work required in the p2p network?  Are bitcoin owners required to pay transaction fees in the future to reward for this?

It is presumed that transaction fees will be large enough that fees will provide the incentive to support the network and verify transactions, after the per-block BTC rewards reduce to zero.

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February 10, 2011, 07:51:32 PM
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When all bitcoins are mined, why would people set their computer to do computational work required in the p2p network?

When all bitcoins are mined, then the big miners will probably move out of the market (if the transaction fees won't be large enough).
If big GPU/clusters miners move out, then difficulty will drop so much, that you willl be able to generate blocks easily using a single multicore CPU.

Are bitcoin owners required to pay transaction fees in the future to reward for this?

Not necessarily. If they won't be paying, and big miners exit market, then it will be very easy to generate blocks.
I think the market will self-balance automatically, and determine the best transaction fee.

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February 10, 2011, 07:55:28 PM
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When all bitcoins are mined...
This will happen around a hundred years from now, by the way.
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February 10, 2011, 09:36:02 PM
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When all bitcoins are mined, why would people set their computer to do computational work required in the p2p network?  Are bitcoin owners required to pay transaction fees in the future to reward for this?

It is presumed that transaction fees will be large enough that fees will provide the incentive to support the network and verify transactions, after the per-block BTC rewards reduce to zero.

As for I understand, BTC market value should be proportional to the work involved in getting more bitcoins mined (per block difficulty).
So, per-block rewards will stay always balanced.


If you don't own the private keys, you don't own the coins.
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February 10, 2011, 11:23:27 PM
 #6

As for I understand, BTC market value should be proportional to the work involved in getting more bitcoins mined (per block difficulty).

Note use of "should be"  In reality, BTC market value is determined by BTC supply and demand.  If there is no demand, difficulty is irrelevant, and mining profitability plummets.

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February 10, 2011, 11:40:17 PM
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As for I understand, BTC market value should be proportional to the work involved in getting more bitcoins mined (per block difficulty).

Note use of "should be"  In reality, BTC market value is determined by BTC supply and demand.  If there is no demand, difficulty is irrelevant, and mining profitability plummets.

And if there is high demand coin prices will rise and competition will drive up mining difficulty. The price of bitcoins determines the mining difficulty, not the other way round.
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February 11, 2011, 12:05:35 AM
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There is also the consideration that in the future, wealthy pools of bitcoins, who maybe be sitting on an equivalent value by then to thousands of tons of gold, have a vested in interest in protecting their bitcoin nominal wealth by contributing compute power to the network.

It seems self-referential but that is where the incentives commonly lie also in banking and finance ... it is in the nature of money.

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February 11, 2011, 12:27:43 AM
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I presume that transaction fees will be rewarded in greater amounts to people who contribute greater processing power?

Do not waste your time debating whether Bitcoin can work. It does work.

"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.

There is no such thing as "market manipulation." There is only buying and selling.
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February 11, 2011, 12:38:25 AM
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I presume that transaction fees will be rewarded in greater amounts to people who contribute greater processing power?

The fee from a transaction is awarded to whoever generates the block that includes the transaction. People who contribute more power will generate more blocks and thus receive more fees.

Looking forward to quantum computing so we can have qubitcoins.
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February 11, 2011, 07:02:06 AM
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When all bitcoins are mined...
This will happen around a hundred years from now, by the way.

but will it still be profitable all the way up to that mark?  Or will the miners drop out much sooner than that?

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February 11, 2011, 07:41:45 AM
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When all bitcoins are mined...
This will happen around a hundred years from now, by the way.

but will it still be profitable all the way up to that mark?  Or will the miners drop out much sooner than that?

It isn't all or nothing and there is a built in auto-adjuster. If it becomes unprofitable then the miners with the highest costs will drop out. This will decrease the difficulty and make mining more profitable for the rest.
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February 13, 2011, 12:08:48 AM
 #13

Ah ok, I didn't realize that is how it works.  I thought the difficulty didn't drop.

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February 13, 2011, 07:08:48 AM
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Ah ok, I didn't realize that is how it works.  I thought the difficulty didn't drop.


Difficulty automatically adjusts to how many mining rigs is out there.
This is very well thought through.

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