The cost and energy problem. Bitcoin - Miners role.

[tuthienloc92bk]

Firstly, I do not know that topic have mentioned yet, so if there are some threads like that, please tell me.
Secondly, all of things I write below that just my opinions and theories, if there are the points which are not reasonable, please enlighten me.
Finally, my english is not good, so if I have the mistakes, please correct it.

Well, I go to the main problem. As we knew:
1. Bitcoin works based on the activities of miners. Miners help to find out new blocks and secure the transation information.
2. Reward for miners is the reward when creating a new block plus the transaction fee.
3. The reward for each block is reduced by half in every 210,000 blocks. Each of the blocks is more and more difficult to find and the reward for each is reduced.

The problem is that at some point, the rewards for miners are not enough to pay for energy fees to create a block. What will happen:

Hypothesis 1: Worst case occurs, bitcoin price does not increase or increase less. In order to pay for miners, transaction costs will have to increase. Thus, one of the great advantages of bitcoin is eliminated. Maybe users will return to use fiat money. No using, no transactions, bitcoin become dead-coin?!?

Hypothesis 2: bitcoin price does not increase or increases less and transaction cost does not increase too. The miners quit and what happened next? No miners, no blocks, no transactions and no bitcoin ?!?

Everything is resolved if bitcoin flies, that's what people expect.

But as bad as I mentioned above, what do you think how to solve this problem?

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[Herbert2020]

Firstly, I do not know that topic have mentioned yet, so if there are some threads like that, please tell me.

there is roughly about 3-4 topics about this subject on the forum. search keywords like "power consumption" and "mining" and things like that and you will find them!

The miners quit and what happened next?

what you need to learn about is "difficulty" it is not some fixed number that rises with block height. it is a number that is mainly adjusted based on hashrate or in other words how many miners are there. if a miner quits, the hashrate goes down and the difficulty adjusts accordingly to make it easier to find blocks for the rest of the remaining miners. the opposite will happen when more miners come in and increase the hashrate.
it is done so that we have 1 block every 10 min or more accurately 2016 blocks per 2 weeks. so no matter how many miners there are we will end up having this much blocks in the fixed time frame of 2 weeks which is the difficulty adjustment period of bitcoin.

[tuthienloc92bk]

there is roughly about 3-4 topics about this subject on the forum. search keywords like "power consumption" and "mining" and things like that and you will find them!

Thank you. I will try.

what you need to learn about is "difficulty" it is not some fixed number that rises with block height. it is a number that is mainly adjusted based on hashrate or in other words how many miners are there. if a miner quits, the hashrate goes down and the difficulty adjusts accordingly to make it easier to find blocks for the rest of the remaining miners. the opposite will happen when more miners come in and increase the hashrate.
it is done so that we have 1 block every 10 min or more accurately 2016 blocks per 2 weeks. so no matter how many miners there are we will end up having this much blocks in the fixed time frame of 2 weeks which is the difficulty adjustment period of bitcoin.

Thank you for that information.
By the way, I have a question: The transactions are approved by the network. So "the network" is all of miners, right?

[MoneyCryptor520]

There are a lot of alternatives for it. Very recently there was one about wind power to generate the energy for the mining. They are in the forum, the topics. You can easily attain them if you look for them.

[tuthienloc92bk]

There are a lot of alternatives for it. Very recently there was one about wind power to generate the energy for the mining. They are in the forum, the topics. You can easily attain them if you look for them.

The hypothetical goal here is to let people think about what happen if the reward for each block is reduced and it comes to a point that its reward not enough to pay for energy fees anymore.

The use of wind energy is theoretically possible. In fact, it is not always possible to build a wind farm as well as the cost of building it is not cheap. If you say, then only those places where there is alternative energy can mine bitcoin?

The problems I have come up with may occur after a few reduced period of bitcoin reward.

[KINGCHACHA1]

The first question I want to ask is, are you a miner? The second question I have for you, are the miners complaining and do they tell you that they want to quite mining? The third question you need to answer is, will you be comfortable if the transaction fee is increased in order to make mining profitable?

[RockFlash]

There has been already a quite a few number of posts out here regarding this topic. The problem with price is very different in all over the world depending on the electricity costs. But, the the margin cost should be around 6,000$. So, if Bitcoin's price remains above the 6k level then I don't think miners should really worry about costs and energy.

[Brutea]

As far as I know, the difficulty of mining which you have mentioned here are adjusted based on the hashrate of Bitcoin. So, if the number of miners are huge, then it is likely that difficulty will be high but the chances of finding blocks are also high due to the number of miners.

[BlackFly]

I am really concerned about the time when Bitcoin's price goes below 6,000$ mark and stays there for 1 or 2 weeks. Though I hope it doesn't happen. But if it happens then there will be chaos among the miners as they cannot really make any profit from selling the BTCs.

[rsrb]

The anticipations mentioned ahead are correct. This the main problem for bitcoin in the coming future but there are also mayn other possibilites to consider. As the miners mine more bitcoin they are the owner of much more digital coin and the price of coin is increasing day by day so the exchange are going to give them required physical money.

[Herbert2020]

...
Thank you for that information.
By the way, I have a question: The transactions are approved by the network. So "the network" is all of miners, right?

the transactions are verified by the full nodes (also called full verification nodes), they are the ones receiving transactions, processing them and propagating to other nodes if valid.
the the miners find blocks by "working" and include those valid transactions in the blocks they find. then they send the found block to the network.
after that again nodes verify the blocks they receive and add it to their blockchain and make it longer.

so the network is not all miners. it is miners as workers and nodes as consensus rules enforcers.

[giantrobot]

Energy costs are of great concern to miners. To run a Bitcoin digger requires a huge amount of energy. No doubt, to dig at full power, the power supply for the PC is very large. In addition, there are too many miners to build the Bitcoin machine, which makes the price of computer components so high that it affects the user, such as a very high graphics card when there are too many. Miners need to buy.
In short, I think the current $ 6,000 Bitcoin has not killed miners.

[coinwizard_]

Bitmain whales should be maintaining the pricepoint above the cost of mining otherwise their business model will collapse. It is unlikely that the cost of electricity will come down so they should hope the price of bitcoin remains high

[croptodic]

It is the reason why there is alternative coins present iin the market . the bitcoin is holding a great position in the market its price is increasing day by day and the amount is also increasing but the situation shows the minning will decrease. But its not going to vanish in one night it can be transferred in altcoins yes it will be a loss now as the lower rate of altcoins but by the time bitcoins reaches in this condition altcoins will be way improved.

[jseverson]

We all know that we are going to see the bit coins vanish. As the intution of experts thw last bitcoin will be minned in the year 2040. What will the reasons for that, the situation mentioned above is one of them, the rewards is decreasing day by day so more and more minners will lose interest because theny wont have any profit after spending the energy cost.

First off, the last Bitcoin will be mined in 2140, which is more than a century from now.

Secondly, if you have any numbers regarding miners losing interest, you may want to share it. I can show you numbers that say hashrate has been steadily increasing, and has recently reached a new all-time-high. There are no indicators for loss of interest.

Bitcoin is just code at the end of the day, and it can always be developed to suit what the community needs. We don't even know for sure if mining will be unprofitable in the future, and exactly why it will happen. In cases like this, it's better to cross that bridge as we approach it; you can't solve an issue if you don't know the underlying problem. It's a non-issue at this point and for the foreseeable future.

[tuthienloc92bk]

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Im not a miner. No miners complain with me and Of course not comfortable. So what are your questions next?

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Thank you. I will research more.

Bitcoin is just code at the end of the day, and it can always be developed to suit what the community needs.

Yes, I hope so.

In cases like this, it's better to cross that bridge as we approach it; you can't solve an issue if you don't know the underlying problem. It's a non-issue at this point and for the foreseeable future.

I understand your optimism, but this problem will happen soon, I think.

[bob123]

Hypothesis 1: Worst case occurs, bitcoin price does not increase or increase less. In order to pay for miners, transaction costs will have to increase. Thus, one of the great advantages of bitcoin is eliminated. Maybe users will return to use fiat money. No using, no transactions, bitcoin become dead-coin?!?

Low fees are just one of many great advantages of bitcoin.
The role of a secured network to transfer value without a middlemen or any trust involved (except into mathematics) remains unaffected.

And (later) with the LN, one would simply close their channel less frequently than when fees are low.

Hypothesis 2: bitcoin price does not increase or increases less and transaction cost does not increase too. The miners quit and what happened next? No miners, no blocks, no transactions and no bitcoin ?!?

After some miner quit (the ones with the least capital + highest energy costs leave first) the difficulty is going to adjust.
This leads to mining becomimg more lucrative again. This will again attract new miner.

The whole situation will find an equilibrium in case of the $-price and TX fees being constant.


Both of your hypothesis don't make sense.

[jseverson]

In cases like this, it's better to cross that bridge as we approach it; you can't solve an issue if you don't know the underlying problem. It's a non-issue at this point and for the foreseeable future.

I understand your optimism, but this problem will happen soon, I think.

What makes you think so though? Your reasons are happening right now: prices are barely increasing, fees are as cheap as they've ever been sat-wise, and yet, the inverse of your hypothesis is true. Hashrate has recently hit an all-time-high, and doesn't look like it's about to slow down. There are no indicators that what you're saying will happen soon. If you have something to show, please do. You're just completely wrong otherwise.

[sublime5447]

Power consumption has been discussed several times in this forum, this is rather difficult to understand. The difficulty level doesn't have a fixed value, it follows the block height. If mining is not profitable then there won't be a legit company dares to enter with large capital, they surely have a very mature calculation.

[teamspike911]

Well, what kind of problems? Count what percentage of people who use electricity around the world ... engaged in crypto-currency mining?
In my opinion, this percentage is extremely ridiculous ...